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IMF approves $216 m3-year loan for Kenya

WASHINGTON: The International Monetary Fund said on Friday it had approved a three-year loan for Kenya of about $216 million to support the government's economic reform program.

The first annual loan of about $72 million will be distributed in two equal semiannual installments starting on May 15, the IMF said in a statement.

"Kenya has achieved a major economic transformation over the last three years," the IMF said. Direct controls on domestic prices, internal marketing and external trade have been eliminated, while exchange rates and interest rates are fully market determined.

But progress in economic reform slowed in 1995 and some setbacks occurred, the Fund said.

The economic program calls for real growth of five percent in 1996 while limiting inflation to no more than five percent and cutting the current account deficit to 1.3 percent of gross domestic product from 4.2 percent in 1995.

The budget deficit would be cut to 1.9 percent of GDP in 1995/96 from 2.5 percent in 1994/95.

Other objectives in 1996 would include further progress in privatization and restructuring of key enterprises, restructuring the civil service and making the Central Bank of Kenya more indedpendent.

The government is also planning to target poverty measures and increase the poor's access to social services.

"The key to translating Kenya's recent economic gains to high and sustained economic growth is to enhance the confidence of private investors," the IMF said.-Reuter