Following public lash out, the International Monetary Fund (IMF) has explained why it chose to grant Kenya a Ksh 255 billion loan.
IMF released a statement defending its decision. In the statement, IMF noted that Kenya had shown commitment in fiscal reforms.
“Kenyan authorities have demonstrated an unwavering commitment to fiscal reforms during this unprecedented global shock. The country’s medium-term prospects remain positive,” the statement reads in part.
IMF explained that they granted the loan under to programs. The programs are the Extended Fund Facility (EFF) and the Extended Credit Facility (ECF). The total amount is approximately Kshs 255 billion.
IMF also pointed out that the Ksh 255 billion loan is an extension of another loan wiorth Ksh 80 billion that it gave the country in May 2020.
According to IMF, the new loan will reduce debt vulnerabilities, address weaknesses in state-owned enterprises, control spending, and protect vulnerable groups.
“The three-year financing package will support the next phase of the authorities’ Covid-19 response. It will also support their plan to reduce debt vulnerabilities. At the same time, the loan will safeguard resources to protect vulnerable groups,” IMF noted.
More than 200,000 Kenyans have signed an online petition asking IMF to cancel the loan that it recently approved. Kenyans claim the money will be lost to corruption.