Kenya is set to receive a total Kes 44 billon ($410 million) representing the second tranche of the Kes 251 billion ($2.34 billion) 38-month loan facility from the IMF.
Staff from the International Monetary Fund (IMF) and Kenyan authorities reached a staff-level agreement on economic policies to conclude the first review of the three year program on Monday.
The agreement followed a virtual mission by IMF staff to Kenya which run from April 29 to May 14 which was marked by discussions on reforms and policy priorities.
The disbursement of the Kes 44 billion is expected to follow up the initial issuance of Kes 33 billion ($307.5 million) last month.
The government is set to shortly publish an audit of all COVID-19 related expenditures covering the financial year ended in June 2020 as part of its show of transparency and anti-corruption fight.
Further to the audit, the government has been obligated with publicizing comprehensive information on all firms that sign procurement contracts including the names of beneficial owners.
Moreover, the government is tasked with developing a strategy to assess and manage risks to the budget from state owned enterprises (SOEs).
In its updated country report published in April, the IMF outlined key policy reforms to be undertaken by Kenya to return to its desired fiscal consolidation path and ease exacerbated debt vulnerabilities.
Among the outlined reforms which underpinned the $2.34 billion loan program include the restructure of ailing State Corporations including three of the biggest public universities and the raising of tax revenues.
The visiting IMF staff team noted the country had effected the desired changes.
“The authorities have taken strong efforts to achieve their planned deficit path in a highly uncertain policy making environment. They met the fiscal balance target at end-March by a wide margin and had fully implemented their planned tax policy measures, although with continuing pressures from the pandemic, tax revenue yields were slightly below expectations.” Mary Goodman said.
“The EFF/ECF program recognizes the central importance of having delivered on policy actions even as tax yields remain uncertain in the near term,” – Mary Goodman, Head, Kenya virtual mission.
The Kes 44 billion now awaits a final approval by the IMF Executive Board which sits in Washington DC.
Cognizant of the continued evolution of the COVID-19 pandemic and its resultants effects on the economy, the IMF has trimmed the country’s projected GDP growth to 6.3 per cent from an ambitious 7.6 per cent.