Kenya’s liquidity crunch has been boosted by the International Monetary Fund’s (IMF) decision to increase its lending programme by Ksh98 billion.
This was announced on Tuesday by President William Ruto’s chief economic adviser according to Reuters.
Ndii welcomed the move noting that it was timely considering that Kenya had a Ksh300 billion Eurobond maturing on June 2024.
“It can augment our programme as of now up to $650 million (Ksh98 billion) that they have agreed to do,” Ndii stated.
Economic Advisor David Ndii speaking during an interview with Africa Uncensored on August 29, 2018.
The economist noted that this was agreed following a visit to the country by an IMF team last week.
During the visit, the IMF team conducted the sixth review of the programme.
While the IMF is yet to issue an official statement on the outcome of the review, Ndii revealed that it had been successful.
The news came hours after Ndii complained that former President Uhuru Kenyatta had thrown the country into a liquidity crunch by cancelling Ksh116 billion Eurobond days to the 2022 general election.
To rectify the blunder, Ndii revealed that Kenya had been forced to borrow more through syndicated bank loans, a situation that has increased Kenya’s public debt past the Ksh10 trillion mark.
In July, following a successful fifth review, IMF advanced to Kenya a Ksh146 billion.
At the time, the IMF announced that Ksh56 billion would be used to shore up the country’s economy and boost its foreign exchange reserves while the rest of the cash would be used for building resilience against climate change.
Haimanot Teferra, the IMF Mission Chief for Kenya, explained that the decision to advance the Ksh146 billion was arrived after Ruto’s administration showed it had a viable repayment formula.
“The authority (Kenya) was able to provide us with contingency plans on how the loan would be repaid,” she stated then.
President William Ruto meets IMF Managing Director Kristalina Georgieva in Sharm El-Sheikh, Egypt on Tuesday, November 8, 2022.