Kenya is set to access $606 million loan from the International Monetary Fund IMF. This is coming after the IMF board approved the seventh and eighth review of President Ruto’s economic reforms.
Prior to the approval, both parties had reached an agreement on the $3.6 billion program. However, the program could not take off due to nationwide demonstration that turned deadly.
Kenya has been battling huge economic challenges compounded by rising debt profile and high inflation. Ruto looked for a way out when he introduced the Finance bill to raise funds and reduce the dependence on borrowing. However, the tax bill was met with high resistance leading to its withdrawal.
In August this year, the government announced plans to re-introduce some sections of the bill to widen the tax net and reduce debt burden.
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However, Kenya still faces a difficulty in boosting domestic revenue, building critical infrastructure and meeting up debt servicing obligations. To solve this problems, Kenya will be accessing the IMF $606 million loan facility.
With the facility, Kenya intends to tackle issues like liquidity challenges, high debt repayment and a deficit in infrastructure.
In addition, the facility provides a financial alternative for Ruro’s government outside of its recent drive to raise taxes.
