Kenya Receives Ksh 78.4 Billion From IMF: Will It Be Used To Develop The Economy Or For Buying Tea?

The International Monetary Fund (IMF) executive board has approved 78.4 billion shillings in emergency financing to help Kenya respond to the sudden shocks that have come as a result of Covid-19.

The financing from the IMF will attract zero interest rate and has a grace period of five and a half years and a final maturity of 10 years. Kenyans are, however, skeptical about whether the loan will be used for the intended purpose.

According to the IMF deputy managing director, Mr. Tao Zhang said that “emergency financing under the Rapid Credit Facility (RCF) will deliver liquidity support for Kenya to help cover its balance of payment gap this year.”

The financing will “provide much-needed resources for fiscal interventions to safeguard public health and support households and firms affected by the crisis.”

Kenyans are worried that the cash will be looted just like any other money that the government has either borrowed from the World Bank, International Monetary Fund, or collection from revenues.

With Covid-19, the country has received financial assistance from various organizations and countries to help in the combating of the pandemic and salvage the economy.

There are already fears that the cash being contributed to the fight against Covid-19 is being misused by those in charge, especially at the Ministry of Health, with the latest allegation being that of using 4,000,000 for tea and snacks.

So, will the loan from the International Monetary Fund be used for the intended purpose or will be looted just like the rest? Will the Kenyans on the ground being choked by the fast-spreading pandemic feel the relief of the amount from IMF or it will just be “business as usual”?

The Kenyan Economy

Covid-19 has affected almost every sector in Kenya. Hotels have shut down, bars and clubs are no more, the transport sector is in shambles while schools and colleges have shut.

Millions of Kenyans have lost their jobs and things are prone to get worse in the next two months. Kenyan firms have resorted to laying off staff as the easiest way to help them remain afloat.

The Kenya National Bureau of Statistics estimates that the Kenyan economy will grow at a slower pace between 1.8 and 2.5 percent in 2020, a drastic drop from a projection of 6 percent.

The Central Bank of Kenya has cut its economic growth projection from 6.2 percent for the year 2020 to 3.4 percent.

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