The International Monetary Fund’s (IMF) board has approved the disbursement of $447.39 million to Kenya after a review of its lending programme, the fund said on Tuesday.
Kenya’s public debt had begun to “level off” due to fiscal consolidation progress, the fund said in a statement, adding it has allocated additional financing under an existing facility.
The East African nation struck a 38-month financing deal with the IMF in April last year, under its extended fund facility and extended credit facility. The latest disbursement takes the total so far to $1.65 billion.
Kenya will now get a total of $2.416 billion from the current deal, the IMF said. Both sides agreed the increment last month to cover external financing needs “resulting from drought and challenging global financing conditions”.
The government cancelled the planned issuance of a Eurobond in June due to a surge in bond yields.
President William Ruto’s government, which took over in September, plans to cut expensive commercial borrowing in favour of cheaper sources like the World Bank to reduce the debt servicing pressure on revenue.
Kenya’s economy was “resilient” and expected to expand by 5.3% this year, the IMF said, adding that inflation was expected to peak in early 2023.