The International Monetary Fund on Wednesday said its executive board has approved a $739 million emergency loan for Kenya and $491.5 million for Uganda under the Rapid Credit Facility to help them respond to the negative economic shock caused by the coronavirus pandemic.
The facility carries a zero percent interest rate, a grace period of 5.5 years and a final maturity of 10 years.
Kenya has 581 confirmed cases of the novel coronavirus and 26 deaths.
The funding will help Kenya “provide much-needed resources for fiscal interventions to safeguard public health and support households and firms affected by the crisis,” IMF Deputy Managing Director Tao Zhang said in a statement.
“The impact of COVID-19 on the Kenyan economy will be severe. It will act through both global and domestic channels, and downside risks remain large,” the IMF said in a statement.
“While the authorities have taken decisive action to respond to the pandemic’s health and economic impacts, the sudden shock has left Kenya with significant fiscal and external financing needs.”
Kristalina Georgieva, Managing Director IMF, said they welcome Kenya’s response to COVID19, including cash transfers to the most vulnerable and the approved financing will provide support to the efforts.
Good #IMF news for #Kenya on the day #coronavirus cases reach a (small) record high. But compared to many in SSA, Kenya has found few cases per capita – just 1 per 100k people https://t.co/5Z8OJMa9Uu pic.twitter.com/G4Mzmhlq9U
— Charlie Robertson (@RencapMan) May 7, 2020
The money for Uganda will aid the country’s “urgent balance of payments and budget support needs,” Zhang said.
“The global COVID-19 pandemic is expected to severely hit the Ugandan economy through several channels, with detrimental effects on economic activity and social indicators. The external and fiscal accounts are expected to deteriorate, creating substantial urgent external and fiscal financing needs,” Zhang said.
Uganda currently has 100 confirmed cases of COVID-19, with 55 recoveries since the outbreak was declared on March 21.