Kenya Finally Bows To IMF Proposals With Multi-Billion Loan In Review
Kenya could soon unlock its Ksh464 billion ($3.6 billion) loan facility from the International Monetary Fund (IMF) after the government finally met all of the necessary conditions, clearing the way for the disbursement.
CBK Governor Kamau Thugge stated that Kenya met all of the Bretton Woods Institution’s targets, which paved the way for future engagement with the multilateral lender.
Thugge spoke to Reuters on the sidelines of the World Bank Group and IMF’s annual summit.
“We have achieved what is needed for the reviews to be completed, but obviously there are other targets for December,” Thugge told journalists from the British publication.
CS Hon. John Mbadi, alongside PS Dr. Chris Kiptoo and CBK Governor Dr. Kamau Thugge held a bilateral meeting with International Finance Corporation Managing Director Makhtar Diop @Diop_IFC to discuss key economic priorities. The meeting leveraged Public-Private Partnerships… pic.twitter.com/iSXrwXOSmS
— The National Treasury & Economic Planning (@KeTreasury) October 24, 2024
Thugge, while addressing the press, stated that the government successfully tamed inflation, which has declined to a staggering 3.6% from 7.7% in the same period last year, depicting an improvement in the country’s economy.
The Central Bank Governor also highlighted the increase in forex reserves, which stood at $8.6 billion by mid-October, equivalent to four months’ worth of imports.
Today's Indicative Rate – 24 October 2024 pic.twitter.com/gfGkZj2BWR
— Central Bank of Kenya (@CBKKenya) October 24, 2024
According to Thugge, the central bank’s decision to cut base lending rates at the beginning of the month also contributed significantly to the IMF’s loan disbursement.
On October 4, the central bank cut the base lending rate by 75 basis points, to 12.00 percent.
When asked if the country would continue to apply for loans from the lender after the upcoming disbursement, Thugge assured the publication that the country would consider engaging further, but only after internal consultations.
“It will depend on the balance of payments and needs, it will depend on the ambitiousness of the targets that we agree. But definitely, we will have our relationship going forward with IMF,” Thugge added.
A staff-level agreement between Kenya and the IMF is expected to occur on October 30th this year.
During the meeting, the multilateral lender will authorize the disbursement of Ksh78 billion.
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In 2021, Kenya began talks with the IMF about disbursing the Ksh464 billion that was supposed to be disbursed in trenches.
After several years of discussions, President William Ruto’s administration reached an agreement with the lender to disburse the funds in stages.
The first phase of the funds was supposed to be disbursed in June of this year, but it was suspended after Kenyans took to the streets to protest the defunct Finance Bill 2024.
As the demonstrations grew, President Ruto was forced to withdraw legislation that proposed a slew of task measures as part of the IMF’s fiscal conditions for the country.
Kenya Finally Bows To IMF Proposals With Multi-Billion Loan In Review
