Kenya Receives KSh32 Bn Loan From IMF To Deal With Coronavirus Crisis

IMF Reaches Staff Level Agreement on the Second Reviews of the Extended Fund Facility and Extended Credit Facility for Kenya and Discusses the 2021 Article IV Consultation

The International Monetary Fund (IMF) finally approved a disbursement of  $28.5 million ( KSh32 billion) to Kenya. 

The funds are aimed at supporting Kenya’s program to address debt vulnerabilities and response to the Covid-19 pandemic and at enhancing governance.

The funds are as a result of the completed second review of the 38-month Extended Fund Facility (EFF) and Extended Credit Facility (ECF) – funded program.

The disbursement brings the total support from IMF to Kenya to USD 984.0 million (Ksh 109.8 billion) in 2021.

“The Kenyan authorities remain firmly committed to their economic programme in a challenging environment. The programme performance has been robust. All quantitative targets were met the FY 2020/21 outturn overperformed and all 2021 structural benchmarks are now completed except one,” IMF Deputy Managing Director and Acting Chairperson Antoinette Sayeh said.

The IMF said Kenya has shown remarkable resilience to the coronavirus pandemic in 2020 and is staging an economic recovery. The IMF estimates that growth will come through at 5.9 per cent in 2021.

“We believe that the program will continue supporting Kenya’s COVID-19 response as well as the government’s economic restructuring efforts, which were hampered by the pandemic.

Furthermore, we believe that shifting from expensive commercial debts to concessional loans will reduce borrowing costs since such loans have more favourable terms and conditions than those offered by commercial finance markets, such as lower interest rates and deferred or income-contingent repayments,” Cytonn Investments says in a commentary.

“However, concerns remain elevated as more virus variants emerge, global financial conditions tighten and potential pressures ahead of the 2022 August elections heat up posing a downside risk to the economic recovery.”