The International Monetary Fund team and Kenyan authorities have reached a staff-level agreement on a 38-month program to help the next phase of the country’s COVID-19 response, the IMF said in a statement on Monday.
The staff-level agreement is subject to IMF management approval and Executive Board consideration, which is expected in the coming weeks.
“I am pleased to announce that the Kenyan authorities and the IMF mission team have reached agreement on economic and structural policies that would underpin a 38-month program under the EFF and ECF arrangements for about US$2.4 billion,” said Mary Goodman who led a staff team from the International Monetary Fund (IMF) on virtual missions to Kenya from December 9 to 17, 2020 and from February 4 to 15, 2021.
The missions were aimed at undertaking negotiations on a combined 38-month program under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) arrangements.
“The program will support the next phase of the country’s COVID-19 response and the authorities’ plans for a strong multi-year effort to stabilize and begin reducing debt levels relative to GDP, laying the ground for durable and inclusive growth over the years to come,” Goodman said.
According to their the IMF’s assessment and justification for the loan, the Kenyan economy is still “picking up from an unprecedented shock suffered as a result of the COVID-19 pandemic. Notwithstanding the recovery, uncertainty remains in a durable return to the path of strong, sustainable, and inclusive growth.”
The IMF said the IMF authorities have already begun reversing some of the earlier extraordinary measures introduced at the outset of the shock, while maintaining others.
“Building on the steps already taken, the program would support the authorities’ efforts and provide resources to protect vulnerable groups,” said the IMF.