Reported by
Faridah N Kulumba
The International Monetary Fund (IMF) has approved another Sh 44.2 billion tranche to be wired to the Central Bank of Kenya (CBK) as part of 38-month program, after its executives had completed their disbursement engagements with Kenyan officials, reported YallAfrica.
The IMF announced that its staff team, led by Ms Mary Goodman, conducted a virtual mission to Kenya from April 29 to May 14, 2021. Kenya’s officials together with the IMF team discussed progress on reforms and the authorities’ policy priorities within the context of the first review of Kenya’s economic program supported by the lender’s Extended Fund Facility (EFF) and Extended Credit Facility (ECF) arrangements.
“The IMF staff team and the Kenyan authorities have reached a staff-level agreement on the first review of Kenya’s economic program under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF),” said Ms Goodman. This came a month after the IMF approved a Sh257 billion loan amid a public outcry over Kenya’s government ability to repay the pilling debt.
Kenya is expecting to receive the second loan next month, which shows that the IMF is content with the reforms being implemented by Kenya’s government since the loan is tied to some specific performance conditions.
Kenyans are enraged with the IMF over billions more loans
Last month over 160,000 Kenyans signed an online petition asking the International Monetary Fund to cancel its approval of a $2.34 billion loan for Kenya, citing mismanagement of funds by the government and the county’s increasing debt load. The angry petitioners using the hashtags #StopGivingKenyaLoan and #StopLoaningKenya, told the IMF that the previous loans to East African countries were lost in corruption.
Over the years, analysts and the public in general have raised concerns about Kenya’s public debt, which has tripled since Uhuru Kenyatta became president in 2013. Saalim Gooner, a Facebook user, posted on the official IMF Facebook page, asking “Why are you approving loans to this irresponsible government of Kenya? You are sinking our economy deeper.”
Government’s defence
The government of Kenya however, argued that the amount is necessary to fight the Covid-19 pandemic and reduce debt vulnerabilities. Treasury Cabinet Secretary Ukur Yatani explained that the access to vaccines is critical, and help from the international community is urgently required.
But why does the IMF continue approving more loans when Kenyan’s are furious?
IMF has commended Kenya’s decisive policy actions to contain the Covid-19 outbreak saying authorities’ actions helped cushion the blow to the economy and maintained the momentum necessary to advance Kenya’s economic reform agenda.
“With easing of the third wave of Covid-19 infections compared to high levels seen into April, containment measures have been lifted. The authorities have also launched a Covid-19 vaccination program , and the IMF program is designed to support Kenya’s efforts to accelerate and expand vaccinations,” IMF said in a statement.
According to Quartz Africa, the IMF deputy managing director Antoinette Sayeh said in a statement that “The Kenyan authorities have demonstrated a strong commitment to fiscal reforms during this unprecedented global shock, and Kenya’s medium-term prospects remain positive.” The lender said the economic recovery should be sustained, although the persistence of the pandemic suggests the pickup envisioned in 2021 will be slightly less strong than anticipated. IMF staff now projects Kenya’s economy to expand by 6.3 percent in 2021.
