A boy walks in front of a graffiti promoting the fight against the coronavirus disease (COVID-19) in the Mathare slums of Nairobi, Kenya, May 22, 2020 Photograph:( Reuters )
The funds will be divided over a period of 38 months, starting with an immediate disbursement of nearly $307.5 million
Considering a hard year that Kenya has had due to the existing financial constraints and the added pressure of the coronavirus pandemic, the IMF has approved a $2.34 billion aid package for the country.
The IMF believes this aid package “address the urgent need to reduce debt vulnerabilities”. The funds will be divided over a period of 38 months, starting with an immediate disbursement of nearly $307.5 million “usable for budget support”.
“Kenya was hit hard at the onset by the Covid-19 pandemic,” the IMF said. However, it also highlighted the country’s “forceful policy response” that helped it reach an economic recovery in 2021 after a small contraction in GDP in 2020.
The crisis, however, has also worsened “pre-existing fiscal vulnerabilities”.
“Kenya's debt remains sustainable, but it is at high risk of debt distress,” IMF’s statement read, adding that “fiscal and balance-of-payments financing needs remain sizable over the medium term.”
This aid package has been praised as “a strong signal of support and confidence” by the institute’s deputy managing director, Antoinette Sayeh, who also stressed that the package is “subject to notable risks, including from uncertainty about the path of the pandemic.”