IMF Approves $2.34 Billion Package for Kenya

IMF Board approves about US$2.34 billion ECF and EFF arrangements for Kenya.

The three-year financing package will support the next phase of the authorities’ COVID-19 response and their plan to reduce debt vulnerabilities while safeguarding resources to protect vulnerable groups.

The Fund-supported program will also advance the broader reform and governance agenda, including by addressing weaknesses in some state-owned enterprises (SOEs) and strengthening transparency and accountability through the anticorruption framework. This comes as Fitch Ratings recently affirmed Kenya’s credit rating at ‘B+ ’ with a negative outlook. Fitch says that on the positive, the rating reflects the country’s strong economic growth, macroeconomic stability, and favourable public debt composition.

Estimates show that Kenya faces US$2.6 billion in sovereign external debt servicing in 2021 and US$3.6 billion in 2022.

Kenya will use a combination of the IMF financing, a US$1 billion World Bank loan as well as a Eurobond issuance in 2021 and 2022 to service this debt obligation.