IMF Makes Significant Progress in Talks with Kenya

International Monetary Fund logo is seen outside the headquarters building during the IMF/World Bank spring meeting in Washington, U.S., April 20, 2018. REUTERS/Yuri Gripas

Enterprise Television- IMF Makes Significant Progress in Talks with Kenya

The International Monetary Fund (IMF) on Friday after a two week visit to Nairobi said the IMF’s mission to assess the Kenyan economy has achieved a significant progress and talks with the government will continue in the coming weeks.

Kenya secured a six-month extension for its stand-by credit arrangement of $989.8 million from the fund in March, and is seeking another extension when it expires in mid-September.

The IMF has pre-conditioned the extension of the stand-by credit, used for balance of payments support, on a number of measures, including the repeal of a cap on commercial lending rates which was imposed in 2016.

The finance minister, Henry Rotich, moved to repeal the cap in his June budget to parliament but some influential lawmakers have vowed not to support the move. The budget must still be debated and passed by lawmakers before it becomes law.

IMF in a statement said “The authorities reiterated their commitment to macroeconomic policies that would maintain public debt on a sustainable path, contain inflation within the target range, and preserve external stability.”

It said the East African nation had met its fiscal targets during the 2017/18 (July-June) fiscal year after the government managed to narrow the budget deficit to 7.0 per cent of GDP from 9.0 per cent the previous year.

Revenue collection had, however, failed to meet the set target during the financial year, coming in at 2.2 per cent of GDP lower than the set target, the fund said, without giving the target level.