The International Monetary Fund (IMF) indicated that recent actions have hindered the country’s fiscal consolidation efforts. After a delay of over three months, the IMF reduced its financial support to the government, reflecting concerns about the ongoing economic measures in place.
In response to widespread protests that resulted in significant property damage and disruption of government operations, President William Ruto’s administration decided to withdraw the Finance Bill 2024. This legislation faced intense opposition from the Kenyan populace, leading to the emergence of a grassroots movement known as The Genz Movement, which advocated for change.
The National Treasury had anticipated a total disbursement of KSh 112.7 billion from the IMF as part of the 7th and 8th Reviews to address the fiscal deficit. However, the IMF ultimately approved only KSh 78 billion, emphasizing that these adjustments would help reduce Kenya’s interest payment obligations.
“Following the resolution of exceptional financing needs earlier this year, the Board approved a reduction in the total access under the EFF/ECF arrangements from exceptional access, to within the normal access limits and a rebalancing of access toward the zero-interest ECF arrangement,” the IMF board statement read
By Hussein Waiyaki