IMF Reveals the Reason behind the Loan to Kenya

The International Monetary Fund (IMF) on April 7 posted a statement on its official website revealing the reason why it loaned Kenya Sh255 billion. The loan is aimed to help Kenya contain its public debt as well as “support the next phase of the government’s COVID-19 response and address the urgent need to reduce debt vulnerabilities.”

The loan is expected to help cushion the impact of the pandemic and provide increased support for impacted groups. This includes protecting the health and social expenditures in non-priority areas such as transfers to vulnerable groups, health coverage and insurance, food programs, and vaccination and immunization programs.

“The central objective of the loan to Kenya is to gradually stabilize the public debt. The budget deficit will be reduced over time (as the Covid-19 shock eases) through a combination of revenue mobilization and spending rationalization measures,” IMF revealed in the statement.

IMF has also put in place measures to ensure that the money loaned to Kenya is not stolen by graft lords. The measures include publishing procurement information including beneficial ownership data of companies awarded contracts, review of the current legal framework for asset declarations of senior public officials and conflict of interest rules, and effective implementation of Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) measures.

By Fatima Shabir