Kenya’s economy registered a strong rebound in 2021 after the COVID-19 shock in 2020. Real GDP growth accelerated to 5.1% in 2021 after contracting by 0.3% in 2020, according to the International Monetary Fund “(IMF”). Notwithstanding this, the economic outlook remains exposed to global and domestic risks due to continued COVID-19 challenges, tightening global financing conditions, and possible pickup in political tension related to Kenya’s upcoming general elections scheduled for August 2022. New challenges include drought in the northern regions of the country and emerging security needs. The IMF provided emergency COVID-19 pandemic support in May 2020, and in April 2021 approved a three-year financing package (c.US2.3bn) to support the next phase of Kenya’s COVID-19 response and the government’s plan to reduce debt. The IMF funding support program will also advance Kenya’s broader reform and governance agenda, including addressing weaknesses in some state-owned enterprises (“SOEs”), strengthening transparency and accountability through the anti-corruption framework, strengthening the monetary policy framework, and supporting financial stability.
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