Kenya President Ruto confident of receiving $1bn fresh IMF disbursement
Tuesday April 30 2024
Kenya’s President William Ruto giving a speech at a past function. PHOTO | FILE | NMG
Kenya expects a green light for a $1 billion disbursement from the International Monetary Fund (IMF) next month, President William Ruto said, which would boost an economy showing improvement after averting a debt crisis earlier this year.
Kenya's shilling currency has bounced back from record lows since the government issued a $1.5 billion Eurobond in February that calmed market jitters over a potential default on a $2 billion bond that matures in June.
The currency's woes combined with high inflation and new taxes intended to plug budget deficits have driven up the cost of living, fuelling anger and occasional protests.
Robust lending to Kenya from the IMF and World Bank has helped the government to navigate a liquidity crisis.
The country received a $941 million lending boost from the IMF in January, which brought the size of its programme with the fund to $4.43 billion, with around $2.5 billion outstanding.
Read: IMF approves $685m new funding to Kenya
Ruto told Reuters that IMF officials would arrive on May 9 for a review meant to unlock a $1 billion tranche.
"That process is going on very well," he said in the interview on Monday, adding that talks between the Kenyan cabinet secretary of Finance and the IMF in Washington during the World Bank/IMF spring meeting earlier this month were "extensive, very successful". The IMF has not commented on the ongoing review.
In recent weeks, devastating floods have left at least 169 people dead and piled spending requirements on the government.
Even so, Ruto reiterated an earlier vow to cut spending in the upcoming fiscal year by 12 percent, from Ksh4.2 trillion to Ksh3.7 trillion.
Read: Kenya to cut 2024/25 spending plan by 12pc
The fiscal deficit is projected to narrow to 3.9 percent of gross domestic product (GDP) in 2024/25 financial year (July-June) from 4.9 percent in this financial year.
Earlier on Monday, Ruto and other African heads of state called for rich countries to commit record amounts to a low-interest World Bank facility for developing nations, saying they were facing deepening debt and climate crises.
"We want a fair international financial architecture," Ruto said.