The International Monetary Fund (IMF) plans to release $244m to Kenya to fund its budget “in the coming weeks” after its staff expressed satisfaction with Nairobi’s economic reforms in the face of Covid-19.

The IMF said its staff is satisfied with the Kenyan government’s progress in its economic reform programs, and the deal now awaits approval by the Fund’s management and board.

Kenya will have access to $244 million, bringing total IMF support in a 38-month financing facility to $1.17 billion under the Extended Financing Facility (EFF) and Extended Credit Facility (ECF). ).

Read: IMF approves $258 million for Kenya budget support

“The IMF staff team and the Kenyan authorities have reached a staff-level agreement on the third review of Kenya’s economic program under the MEDC and ECF arrangements. The agreement is subject to approval by IMF management and the Executive Board in the coming weeks. Following the Executive Board’s review, Kenya would have access to SDR 179.13 million (equivalent to about $244 million), bringing the total IMF financial support under these arrangements to 865.77 million SDR (equivalent to about $1,178 million),” the IMF said. mission led by Mary Goodman.

SDR stands for Special Drawing Rights, an international reserve asset created by the IMF to supplement the official reserves of its member countries.

In April 2021, the IMF Executive Board approved a three-year, $2.34 billion financing plan for Kenya to support the government’s response to Covid-19, improve governance, and reduce debt vulnerabilities while preserving resources to protect vulnerable groups.

Between March 31 and April 22, IMF staff engaged Kenya to discuss the authorities’ reform progress and policy priorities under the third review of Kenya’s economic program supported by the EFF and the ECF.

In an April 25 statement, Ms Goodman said Kenya’s economy had experienced a robust recovery as the effects of the pandemic faded.

“Repercussions from the war in Ukraine are expected to have a modest impact on near-term growth, as Kenya’s direct exposure to Russia and Ukraine is relatively limited,” she said.

Kenya has been hit hard by the Covid-19 pandemic, with the economy contracting 0.1% in 2020 from 5.4% in 2019.

The IMF projects a rebound to 5.7% in 2022, reflecting a recovery in agriculture and a continued recovery in services and other sectors.

“The medium-term outlook appears favorable, supported by Kenya’s proactive reform efforts, although the outlook is subject to uncertainty. Fallout from the war in Ukraine is expected to temporarily push up inflation as domestic retail fuel prices gradually rise to global levels,” Ms Goodman said.

In May 2020, the Fund approved the disbursement of $739 million to be drawn under the Rapid Credit Facility (RCF) to support the government’s response to the Covid-19 pandemic.

According to the IMF, Kenya’s strong program performance provides resilience that helps the country weather these global shocks while staying within the authorities’ targets and continuing to make progress in addressing debt vulnerabilities.