Treasury Cabinet Secretary Henry Rotich on Thursday disclosed that Kenya’s standby loan agreement with the International Monetary Fund (IMF) has expired and that Kenya will not seek an extension of the $989.8 million (Sh99.89 billion) safety fee from the lender.
However, Rotich revealed that the government was still engaging in talks with the lender so as to determine which other finance services it can access in the days to come.
The arrangement was first inked in 2016 and it was supposed to expire in March 2018 before IMF issued Kenya with another six month extension which would see the agreement expire in September 2018.
The precautionary fee; which was to be repaid in five years, was meant to safeguard the nation against any unexpected external factors that could trouble the balance of payments.
The original loan amounted to Sh151.38 billion ($1.5 billion) but the Sh49.95 billion ($494.9 million) interest-free quota was not extended upon expiry in March.
Speaking to a section of the press at a budget meeting in Nairobi, Rotich disclosed that expiration of the IMF programme was not uncommon since Kenya had been involved in many such programmes in the past.
“There is nothing unique about the programme ending. I think what’s important is that we did have a very successful two-year programme,” said the CS.
Subsequently, Rotich reiterated that Kenya; which is East Africa’s biggest economy, should deter from asking for support from IMF.
“As a country, we should be relying less and less on IMF facilities, especially since we have come of age in our macroeconomic management,” the CS said
On his part, Treasury Principal Secretary Kamau Thugge who was also in attendance, reaffirmed that the country’s economy would not be in jeopardy following the end of the IMF deal.
According to Thugge, the economy was expected to grow 6.2 per cent in 2019, up from an estimate of 6 per cent in 2018
Following the revelation that the IMF facility loan had expired, the shilling weakened by 0.3 per cent which compelled the Central Bank of Kenya to facilitate the selling of dollars to banks.