The IMF on Friday approved a $2.34 billion aid package to Kenya to "address the urgent need to reduce debt vulnerabilities," the institution said in a statement.

The Washington-based development lender said the funds would be spread over 38 months, with an immediate disbursement of about $307.5 million, "usable for budget support."

"Kenya was hit hard at the onset by the Covid-19 pandemic," the International Monetary Fund said, highlighting the country's "forceful policy response" that led to an economic recovery in 2021 after a slight contraction in GDP in 2020.

But the crisis has also exacerbated "pre-existing fiscal vulnerabilities."

"Kenya's debt remains sustainable, but it is at high risk of debt distress," the statement said, adding that "fiscal and balance-of-payments financing needs remain sizable over the medium term."

Antoinette Sayeh, IMF deputy managing director, called the aid "a strong signal of support and confidence" but noted it is "subject to notable risks, including from uncertainty about the path of the pandemic."

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