The International Monetary Fund (IMF) had agreed to a US$1 billion (927 billion euro) loan for Kenya, to ease the economic woes of the East African country facing a heavy debt burden of US$70 billion (about €65bn). The proposed bailout package is aimed at shoring up its fast-devaluing currency.
The International Monetary Fund (IMF) had agreed to a US$1 billion (927 billion euro) loan for Kenya, to ease the economic woes of the East African country facing a heavy debt burden of US$70 billion (about €65bn). The proposed bailout package is aimed at shoring up its fast-devaluing currency.
The recent budget of the country contained many new taxes to raise more resources to fund its development activities. The budget for 2023-24 is designed to raise 289 billion shillings (€2 billion) to supplement the 3.6 trillion shillings (€24 billion). The IMF Board, which will meet in July is expected to validate the agreement, which was entered between Kenya and the multilateral lending agency’s staff, to help the country ravaged by the economic crisis. The additional funds will help tie down the immediate financial need of Kenya. This additional lending would increase the IMF’s total exposure to Kenya to US$3.52 billion (€3.2 billion).
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Kenya was earlier considered as the economic powerhouse of East Africa with a population of about 53 million. The country is now facing high inflation (+7.9% year-on-year in April) and a historic drought. The growth rate slumped to 4.8% in 2022, as against 7.6% achieved in 2021. The IMF has also told the East African country to carry out a number of reforms including the disinvestment of public enterprises, a greater degree of privatization, unbundling of the state-owned power utility, privatization of national airlines, elimination of wasteful expenditure, cutting subsidies, etc.
