WASHINGTON, Feb 1 – The International Monetary Fund approved a $509 million loan for Kenya on Monday, to help the country strengthen its foreign reserves as growth returns after an economic downturn exacerbated by the global financial crisis.
The money is aimed at helping the country finance balance of payments shortfalls and give it a cushion of reserves to deal with unforeseen shocks to the economy, the IMF said.
"Kenya\’s economy is bouncing back from the slowdown that accompanied the global financial crisis," IMF deputy managing director John Lipsky said in a statement.
"Sustaining high growth will require addressing remaining macroeconomic vulnerabilities," he said.
Lipsky said the the Kenyan economy is recovering with the help of fiscal stimulus measures, with construction and agriculture sectors rebounding firmly.
He also credited a rise in confidence after the ratification of a new constitution.
The three-year loan program also envisages tax reforms and disciplined government spending.
"A successful implementation of constitutional provisions will also address governance issues, by strengthening the judiciary and overhauling the public expenditure management framework" the IMF said.