Kenya goes for another IMF loan to help fight coronavirus

  • Kenya has applied for another loan less than 6 months after receiving KSh 79.3 billion loan in May
  • The loan is urgently needed to revive cash flow and help government honour debt payment obligations
  • Kenya never made these loan applications during former president Mwai Kibaki’s tenure where funds were borrowed to fund projects

Kenya has approached International Monetary Fund (IMF) to seek for funds to weather the coronavirus pandemic’s adverse effects on the economy.

Kenya’s National Treasury Ministry offices. Photo: Kenyan Wall Street

A report by the Business Daily seen by indicated this was the second time Kenya was reaching out to IMF for a loan in a period of six months.

Tobias Rasmussen, the IMF resident representative revealed that Kenya’s government has asked to be supported

IMF resident representative said the government had applied for additional billions after receiving KSh 79.3 billion in May, 2020.

According to the Brettonwoods institution, Kenya has asked for the money to help manage the economic shocks caused by the coronavirus pandemic.

Treasury Cabinet Secretary Ukur Yatani. Photo: Capital FM

The move comes even as the country is facing a sinking cash-flow situation.

Reduced revenues and failure to service debts as required have marked the reduction of cash flow.

Coronavirus pandemic effects saw the country’s revenue collection miss the target by at least KSh 40 billion in July and August, the first two months after the end of the financial year in June 2020. understands that the loan sought by Kenya is emergency.

This means money granted is supposed to be directly injected into the budget to sustain the public coffers government is dependent on.

Such a situation was never witnessed under former president Mwai Kibaki.

During Kibaki’s regime, Kenya only sought project funding from IMF and World Bank respectively.

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