Kenya granted a $2.34billion loan despite the displeasure expressed by Kenyans.
IMF defends its decision to grant Kenya a loan despite public opposition
In a statement issued by a Deputy Managing Director of IMF, Antoinette Sayeh said “The Kenyan authorities have demonstrated a strong commitment to fiscal reforms during this unprecedented global shock, and Kenya’s medium-term prospects remain positive.”
IMF gave reasons why they had advanced the money to Kenya yet the country still had another multi-billion-shilling loan.
The Bretton Woods institution explained that the loan was approved under two programmes, namely the Extended Credit Facility (ECF) and Extended Fund Facility (EFF) which is for an amount of about Sh255 billi$2.34billion.
The IMF added that its approval resulted in an immediate disbursement of $307.5 million, for budget support.
It added that the loan is also a continuation of another loan given in May 2020, equivalent to US$739 million.
The new loan is to serve the following purposes: reduce debt vulnerabilities through several channels such as raising tax revenues, controlling spending and protecting vulnerable groups, addressing weaknesses in state-owned enterprises, and strengthening the anti-corruption framework.
“The three-year financing package will support the next phase of the authorities’ Covid-19 response and their plan to reduce debt vulnerabilities while safeguarding resources to protect vulnerable groups,” IMF said in a statement.
The statement from IMF comes after several Kenyans expressed their displeasure over loans the IMF grants the government despite what they believe is mismanagement by their leaders.
Meanwhile, over 2000,000 Kenyans have signed an online petition asking the IMF to cancel the recently approved loans. They argue that the loans are often lost to corruption.
But the government has indicated that the loan is vital in the fight against the Covid-19 pandemic and reduce debt vulnerabilities.
Treasury Cabinet Secretary Ukur Yatani said the country needs vaccines to fight the pandemic and help from the international community is urgently required.
