WASHINGTON, (Reuters) – The International Monetary Fund announced on Friday that it had reached a staff-level agreement with Kenya regarding a second IMF loan arrangement review. This would allow the country to release approximately $264 million once approval by its Executive Board in the coming weeks.

If the approval is granted, this disbursement will increase IMF’s financial support to Kenya by $984 million in 2021.

Mary Goodman, IMF Kenya Mission chief Mary Goodman stated that Kenya is experiencing an economic recovery and that COVID-19 has increased its vaccination programs. She also said that the pandemic had caused a significant setback in Kenya’s pursuit of sustainable development.

The country faces new challenges, including droughts in its northern regions and security threats. Goodman stated that energy prices have been rising along with global oil prices. This, in conjunction with higher food and fuel prices has led to an increase in overall inflation, while core inflation remains stable.

According to the IMF, a review of Kenya’s Extended Fund Facility (EFF) and Extended Credit Facility programs revealed that Kenyan authorities were committed to their economic program. Kenya achieved its fiscal targets in 2020/21, surpassing all expectations. Tax revenue is currently recovering for fiscal 2021/22.

Goodman shared with Goodman’s assessment that FY21/22 should have enough space for emergency spending, to address the drought in north-central Nigeria and meet new security requirements.