Kenya will receive Kshs. 262 billion from the International Monetary fund to facilitate recovery from the Covid 19 pandemic in a move that is likely see a return of the stringent IMF conditions experienced by the country in the 1990s.
IMF is set to dispense a 38-month staff level financing package for the economy under its Extended Fund Facility(EFF) and Extended Credit Facility (ECF) arrangements.
According to Mary Goodman who led the IMF mission to Kenya recently, the program will support the next phase of the country’s Covid-19 response and the government’s plan to stabilize the economy by reducing debt levels to be in line with the GDP.
The fiscal deficit may widen to 8.9 percent of GDP this year as the government borrows more to enhance economic recovery and support businesses and households.
Kenya is currently thriving on the wheels of debts. The national debt currently stands at 10.4 trillion shillings, above the ceiling set by the Senate at 9 trillion shillings.
According to the IMF, the country has started to show signs of economic recovery with about 5.6 % real GDP contracted in the 2nd quarter of 2020. The Agricultural sector has remained strong due to above-average rainfall.