International Monetary Fund (IMF) has approved Kenya’s request for a three-and half-year emergency loan to address the next phase of Covid-19 response.
In a statement, IMF revealed it had agreed to grant Kenya the request for an emergency loan stating that there were key principles why the country needed the bailout.
The lender stated that the agreement was reached various virtual meeting with government officials for the last three weeks.
“A staff team from the International Monetary Fund (IMF) led by Mary Goodman conducted a virtual mission to Kenya from October 27 to November 17, 2020, to undertake negotiations on a 3½ year Extended Fund Facility (EFF)/Extended Credit Facility (ECF) arrangement,” reads IMF statement.
According to IMF, the fund will help Kenya in the next phase of the COVID-19 response and stabilization of the economy.
The lender also stated that the fund will help to meet Kenya’s urgent balance of payments need stemming from the outbreak of the COVID-19 pandemic.
“There is broad agreement on the key principles that could underpin a Fund supported program to help the next phase of the country’s COVID-19 response and a strong multi-year effort to stabilize and begin reducing debt levels,” IMF said.
IMF has also cautioned the government over the uncertainty in the economy despite the economic activities starting to pick up.
“Activity has generally been picking up from the trough in April-May, but with remaining weakness in the tourism and education sectors among others,” IMF’s lead Mary Goodman added.
The IMF representives met with Cabinet Secretary National Treasury, Ukur Yatani, Central Bank of Kenya Governor Patrick Njorogeto to conclude the deal.
Kenya will access the funds through the IMF Extended Credit Facility, a program that provides assistance to countries in the next phase of Covid-19 response.