The International Monetary Fund (IMF) has explained why it decided to grant the President Uhuru Kenyatta government a loan facility of Sh255 billion despite a strong opposition from Kenyans.
IMF deputy managing director Antoinette Sayeh says Kenya had demonstrated it was committed to implementing fiscal reforms and had the ability to repay the loan.
“The Kenyan authorities have demonstrated a strong commitment to fiscal reforms during this unprecedented global shock, and Kenya’s medium-term prospects remain positive,” said Sayeh.
IMF advanced more cash to Kenya on top of another multi-billion-shilling loan the Kenyan public feels that it should not add more loans until the previous one is well accounted for.
The Bretton Woods institution approved the Sh255 billion loan under two programs; the Extended Credit Facility (ECF) and Extended Fund Facility (EFF).
Similarly, IMF said the approval triggered an instant disbursement of Sh33 billion for budgetary support and is a continuation of a Sh80 billion loan granted in May 2020.
Uhuru Kenyatta. PHOTO/COURTESY
It said the loan is meant to reduce debt vulnerabilities, controlling spending, protecting vulnerable groups, addressing weaknesses in state enterprises and strengthening anti-graft efforts.
“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,” said IMF in a statement.
This comes as more than 200,000 irked Kenyans signed an online petition on change.org appealing to IMF not to approve more loans to Kenya due to rampant corruption.
Treasury CS Ukur Yatani has defended Kenya’s ever-growing debt appetite, saying it is sustainable and Kenya needs the cash to fight Covid-19 and reduce debt vulnerabilities.
According to the 2021 Budget Policy Statement, Kenya’s public debt stood at Sh7.06 trillion as at June 2020, which is equivalent to 65 per cent of the country’s GDP and keeps growing.
Read more details from IMF.