(Ecofin Agency) - Kenyan authorities have reached a staff-level agreement with the International Monetary Fund under the Extended Credit Facility and Extended Fund Facility. In a May 17 statement, IMF said the deal will have to get validation from the Executive Board before being executed. Once the agreement is approved, Kenya will benefit from $410 million in financing.

This disbursement is part of a vast $2.34 billion program obtained by the country last April to pursue economic reforms and boost its economy in a post-pandemic period. IMF's latest regional economic outlook mentioned that Kenya's GDP dropped by 0.1% in 2020 breaking the positive growth momentum in recent years. This decline, the report said, is mainly due to the restrictive measures adopted to halt the spread of the coronavirus. Covid-19 has affected at least 165,537 people in the country (with 3,013 deaths) but has also affected activities in transport and tourism, two key sectors of the local economy.

“IMF staff commend the authorities’ decisive policy actions to contain the COVID-19 outbreak. Their actions helped to cushion the blow to the economy and maintained the momentum necessary to advance their economic reform agenda. With the easing of the third wave of COVID-19 infections compared to high levels seen in April, containment measures have been lifted. The authorities have also launched a COVID-19 vaccination program, and the IMF program is designed to support Kenya’s efforts to accelerate and expand vaccinations,” said Mary Goodman who led the IMF mission in Kenya.

The envoy said it is essential that the authorities work “to reduce debt-related vulnerabilities and secure resources to support social spending.” This year, the institution expects the Kenyan economy to recover by 6.3%, a trend that is expected to continue and improve in the medium term.

Moutiou Adjibi Nourou