By NAIROBI (Reuters) – The executive board of the International Monetary Fund has approved the seventh and eighth reviews of Kenya’s program, the IMF said on Wednesday, paving the way for the cash-strapped government to access a $606 million loan tranche.
The East African nation and staff of the IMF announced an agreement on the seventh review of its $3.6 billion program in June, but completion of the review at the board level and the subsequent disbursement were disrupted by deadly protests.
More than 60 people were killed in the violent protests which forced President William Ruto to abandon the government’s finance bill, which contained a slew of tax hikes.
“Kenya’s economy remains resilient, with growth above the regional average, inflation decelerating, and external inflows supporting the shilling and a buildup of external buffers, despite a difficult socio-economic environment,” IMF First Deputy Managing Director Gita Gopinath said in a statement on Wednesday.
The IMF also called for improving governance and transparency in Kenya.
“The Kenyan authorities face a difficult balancing act of boosting domestic revenues to protect critical spending in priority areas while meeting heavy debt service obligations,” the IMF said.
The board review also included a component of lending to Kenya under its sustainability window, which is known as RSF.
The IMF’s support is seen as crucial for Kenya to be able to navigate its current liquidity challenges, which are mainly driven by high debt interest repayments.
Government officials have indicated that Kenya will seek another program with the IMF when the current one ends next April.