The International Monetary Fund (IMF) has granted Kenya a new loan of more than $941 million to help support the East African nation through its liquidity issues.
Why is this important: Kenya has been facing a host of economic challenges including increasing debt, currency devaluation and a cost of living crisis. The new funding is under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) programs and will include the release of US$60.2 million (Sh9.6 billion) under the Resilience and Sustainability Facility (RSF) arrangement. Kenya's public debt is estimated to have reached 73 per cent of GDP by end-2023, with debt service consuming about 55 per cent of revenues according to the IMF.
The bottom line: Kenya's GDP growth was 5.1% in 2023 and is projected to be 5.0% in 2024. The country also has a $2 billion Eurobond maturing in June and despite ongoing liquidity pressure and a high risk of debt distress, the East African nation is not expected to default on the payments. How the country manages its upcoming bond maturity will determine has easily it can tap the international debt markets for more funding as conditions improve.