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Financials

UPDATE 1-Kenya seeks $2.3 billion loan from the IMF, Treasury says

(Adds details)

NAIROBI, Nov 23 (Reuters) - Kenya is discussing a $2.3 billion lending programme with the International Monetary Fund for budgetary support, the finance ministry told Reuters on Monday.

The fund hopes a deal on a new lending facility could be presented to its board in early 2021, noting that economic activity was starting to pick up despite a drag from sectors like tourism, it said over the weekend.

The East Africa nation hopes to secure an initial disbursement of $725 million from the fund in the first half of next year, the ministry said in a response to Reuters questions.

The IMF’s top official in Nairobi did not respond to a request for comment.

For nearly two years now, Kenya has abandoned expensive commercial debt to cut back on ballooning repayments, while revenue collection has been squeezed by the pandemic.

As part of that strategy, it secured $1 billion in May in the second ever such direct lending for the budget from the World Bank, after the first was processed last year.

Another loan from the World Bank is also under discussion.

Reporting by Duncan Miriri; Editing by Catherine Evans and Nick Macfie

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