The International Monetary Fund has granted Kenya an extension of its standby facility, giving the country additional time to finish oustanding reviews of an IMF-supported program
The country asked the lender an extension to the US$1.5bn facility, which was withdrawn in June, after it failed to meet budget-deficit targets. The Washington-based lender approved the funds for Kenya to weather the impact of "potential exogenous shocks".
Economic growth in Kenya has been hurt by severe drought with real GDP growth slowing to 4.8 per cent in 2017, according to a statement from the IMF last week.
Highlighting spending cuts in his budget policy statement, Kenya's Treasury secretary Henry Rotich said the government would narrow fiscal deficit to 3 per cent of GDP over the medium term from the projected 7.2 per cent of GDP in 2017-18.
"Completion of the reviews will enable the Kenyan authorities to have access to funds available under the precautionary SBA," the IMF said in a press release.
