The International Monetary Funds has approved another huge loan to Kenya to help the country fight the COVID-19 pandemic.
In the information revealed early Saturday morning, the 38-month program will see Kenya receive Ksh 255.1 billion ($2.34 billion) in loan support.
Combating COVID-19 pandemic
The IMF approved the deal in Washington on Friday, and the money will be expected to help the country in its next phase of combating the COVID-19 pandemic.
The IMF Executive Board said that Kenya had been hit hard at the start of the pandemic. While the country had started making a recovery heading into 2021, challenges remained.
“With a forceful policy response, the economy has started picking up heading into 2021 after posting a slight contraction of 0.1 % in 2020.” The IMF Executive Board said.
The EFF and ECF Facilities
The loan program was achieved under the Extended Credit Facility (ECF) and the Extended Fund Facility. The ECF provides countries with financial assistance but gives them protracted payments balance problems.
Meanwhile, IMF gives the (EFF) when a country faces a serious medium-term balance of payments problems due to slow growth. EFF provides support for programs to correct the structural imbalance.
Kenya is expected to receive an initial disbursement of Ksh 33.5 billion in the coming few days.
This was the second loan Kenyan was getting from IMF after getting close to Ksh 80 billion in May last year. The IMF had also provided that loan to cover COVID-19 vulnerabilities.
— Reuters (@Reuters) April 3, 2021
Hit or miss COVID response
But despite the incredible money received, Kenya’s response to the COVID-19 pandemic has been non-existent. The World Bank had approved another Ksh 82.5 billion a few days ago, while a further Ksh 123.8 billion will arrive from Eurobond.
However, there is little hope for the government to use the money the right way.
It is reported that the country’s debt would likely hit Ksh 7.7 trillion come to the end of June. However, the IMF said that while Kenya’s debt was high, it still ‘remained sustainable.’