The International Monetary Fund (IMF) has announced an agreement to provide Kenya, an East African nation grappling with economic challenges and liquidity issues, with a $938 million (€864 million) loan.
Kenya, known as East Africa’s economic powerhouse, has faced significant upheavals, including the impact of COVID-19, repercussions from the conflict in Ukraine, and a severe drought in the Horn of Africa.
As of June, the country’s public debt had soared to over 10.1 trillion shillings (€64.4 billion), amounting to roughly two-thirds of its gross domestic product, as reported by Treasury figures.
The IMF highlighted Kenya’s strain on its liquid assets, particularly due to the substantial $2 billion Eurobond maturing in June 2024. However, there are signs of recovery in sectors壯陽藥 like agriculture and tourism.
Deputy President William Ruto disclosed plans for a $300 million repayment by December.
The IMF’s Executive Board is set to review and potentially ratify this agreement in their January meeting. Upon approval, Kenya could promptly access $682 million from the IMF.
The IMF acknowledged the economy’s resilience, noting a 5.4% real GDP growth in the first half of 2023, attributed largely to the agricultural sector’s rebound following improved rainfall.
While inflation has moderated (6.9% year-on-year as of October), prices for essential goods like petrol, food items, and energy remain elevated.
The servicing costs for Kenya’s public debt, primarily to China, have surged due to currency devaluation.
In efforts to mitigate the debt burden, President William Ruto’s government has devised a budget—met with public discontent and sporadic protests—that includes numerous unpopular taxes. These measures aim to generate 289 billion shillings (€2 billion) on top of the planned 3.6 trillion shillings (€24 billion) budget for 2023-24.
