The International Monetary Fund (IMF) has approved the disbursement of $110.9-million (about Sh9-bn) to Kenya, and warned authorities to keep an eye on risks posed by the euro zone debt crisis, and the possibility of higher oil prices.

In its latest world economic outlook, the IMF said that growth in sub-Saharan Africa will pick up to 5.4% in 2012, thanks to new mineral and oil production and the growth of export markets outside Europe, according to the fund's latest world economic outlook. However, the Bretton Wood institution warned of knock-on effects to African economies if Europe tumbles further.

"Policies should continue to aim at ensuring that domestic demand grows in line with supply to reduce the external imbalance and keep inflationary pressures in check," the IMF advised Kenya.

It said Kenya's economic reform program had started to yield results: inflation is lower, international reserves are up and the shilling is stronger. The government has also made progress in improving public financial management and tax reforms.

Source: Business Daily