Ahead of the visit, Teferra stated: “At the request of the Kenyan authorities, an IMF staff team will begin initial discussions in the coming days on a possible Fund-supported programme. “The IMF remains committed to supporting Kenya in its efforts to maintain macroeconomic stability, safeguard debt sustainability, strengthen governance, and promote inclusive and sustainable growth for the benefit of the Kenyan people.
“We look forward to constructive engagement with the authorities and other stakeholders during our visit to Nairobi.” In March, Kenya and the IMF agreed to abandon the ninth review under the current Extended Fund Facility (EFF) and Extended Credit Facility (ECF) programmes, which were launched in 2021. Instead, the government made a formal request for a new arrangement, with the IMF promising to engage further with the authorities.
The EFF and ECF were designed to help Kenya address debt vulnerabilities while safeguarding resources for priority social and development spending; build resilience to shocks; enhance governance and transparency; and support broader reforms to unlock the country’s medium-term potential.
Access to about US$3.61 billion in budgetary support under these programmes was conditional upon Kenya meeting agreed targets at each review. These included strengthening tax compliance, improving efficiency in public spending and wage bill management, restructuring state-owned enterprises, rationalising unproductive current expenditure, and better targeting subsidies and transfers while protecting essential social and development spending.
Following the combined approval of the seventh and eighth reviews by the IMF Executive Board on 30 October last year, Kenya’s total access rose to about US$3.12 billion, leaving a balance of US$0.49 billion to be disbursed after the ninth review.
That review was expected to be concluded after a mission to Nairobi between 6 and 14 March this year. However, it remains unclear whether Kenya will still access the final tranche of IMF funds without an assessment of its progress in implementing the agreed reforms.
The IMF’s decision to combine the seventh and eighth reviews followed delays triggered by the Gen Z protests, which derailed several tax measures and reforms contained in the Finance Bill 2024. As a result, Kenya accessed about US$485.8 million under the EFF/ECF arrangements, the last disbursement to date.
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