The International Monetary Fund (IMF) has approved a US$739 million (Ksh78.3 billion) loan to cushion Kenya’s economic climate which has been affected by the Covid-19 pandemic.
The funding will be drawn from the Rapid Credit Facility (RCF), which provides rapid concessional financial assistance with limited conditionality to low-income countries (LICs) facing an urgent balance of payments need.
“Emergency financing under the Rapid Credit Facility (RCF) will deliver liquidity support to help Kenya cover its balance of payments gap this year. It will provide much-needed resources for fiscal interventions to safeguard public health and support households and firms affected by the crisis,”said IMF deputy managing director Tao Zhang in a statement.
Financing under the RCF carries a zero interest rate, has a grace period of five and a half years, and a final maturity of 10 years.
“The Covid-19 pandemic has delivered a large economic shock to Kenya. The pandemic has impacted nearly all facets of the economy—particularly tourism, transport, and trade—and led to urgent balance of payments and fiscal financing needs,” added Mr Zhang.
According to the Treasury CS Ukur Yattani, Kenyan economy is set to grow at a slow pace of 1.8 percent and 2.5 percent this year, from an earlier forecast of 6 percent, due to the impact of the Covid-19 pandemic.
Kenya has so far recorded 582 cases of Covid-19, 26 fatalities and 190 recoveries.