The International Monetary Fund (IMF) said on Monday that it has reached an agreement on the disbursement of 410 million U.S. dollar loan facility to Kenya as part of a financing package approved in April.
In a statement issued online, the IMF said Kenya will receive funds worth 285 million special drawing rights (SDR), equivalent to about 410 million U.S. dollars, once approved by the IMF Executive Board set to meet in the coming weeks.
In April, the IMF approved a financing program of SDR 1.655 billion, or about 2.34 billion U.S. dollars, for Kenya to be disbursed over a period of 38 months under the Extended Credit Facility and Extended Fund Facility arrangements, to support the country’s economic recovery amid COVID-19 pandemic.
About 307.5 million U.S. dollars were immediately released for budget support. The first review of the 38-month aid package took place during virtual discussions from April 29 to May 14.
IMF said in the statement that economic recovery is under way in Kenya and the easing of the COVID-19 third wave in the country suggests activity should continue picking up.
The IMF, however, noted the pickup will be less strong than anticipated due to the pandemic and revised its forecast for Kenya’s economic growth in 2021 downwards to 6.3 percent from an earlier projection of 7.6 percent.
The IMF said Kenya’s growth prospects are strong and in the medium term growth is expected to settle at its potential of just above 6 percent.
The IMF lauded Kenya’s policy actions to contain the COVID-19 outbreak, adding that the government’s actions helped to cushion the blow to the economy and maintained the momentum necessary to advance economic reform agenda.