The International Monetary Fund’s (IMF) decision to increase its lending programme by Ksh98 billion has exacerbated Kenya’s liquidity crisis.
According to Reuters, President William Ruto’s chief economic adviser announced this on Tuesday.
Ndii applauded the move, noting that it was timely given Kenya’s Ksh300 billion Eurobond maturing in June 2024.
“It can augment our programme as of now up to $650 million (Ksh98 billion) that they have agreed to do,” Ndii stated.
The economist noted that this was agreed upon following an IMF team’s visit to the country last week.
The IMF team conducted the sixth review of the programme during their visit.
While the IMF has yet to issue an official statement on the review’s outcome, Ndii revealed that it was a success.
The announcement came just hours after Ndii complained that former President Uhuru Kenyatta had put the country in a liquidity crisis 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.