- It is expecting $750 and €188 million from World Bank and IMF respectively
- In May last year, the country received $1billion (Sh106 billion) from the global lender to support its budget and cushion the economy
Image: EZEKIEL AMING'A
Kenya expects more than Sh200 billion from international lenders by end of June as part of budgetary support as the economy recovers from Covid-19.
Addressing a post-Monetary Policy Committee (MPC) press briefing, Central Bank of Kenya Governor Patrick Njoroge revealed that the country is expecting loans from the World Bank, IMF and AfDB in coming weeks.
The World Bank is expected to release $750 million (Sh81 billion) as part of a third Development Policy Operation (DPO) programme to cushion the local economy from the vagaries of Covid-19.
In 2019, the World Bank disbursed $750 million as Kenya re-engaged the multi-lateral lender for direct support for the first time in years.
Lat May, the country received $1billion (Sh106 billion) from the global lender to support its budget and cushion the economy from the impact of Covid-19.
The amount comprised a $750 million credit from the International Development Association (IDA) and a further $250 million loan from the International Bank for Reconstruction and Development (IBRD).
The loan was priced at 1.35 to two per cent with a five-year grace period with a 30 year repayment period.
According to the 2021 Budget Policy Statement published in March this year, Kenya will push for extended DPO support into the next couple of years with Sh74.3 billion and Sh131.1 billion lined up in 2021/22 and 2022/23 fiscal years.
''The $750 million facilities is expected in next couple of weeks before July. The $410 million which is part of $2.34 billion loans from IMF and another credit from AfBD is also expected,'' Njoroge said.
Last week, IMF said it was satisfied with the reforms Kenya is undertaking as part of its tough funding conditions.
It announced that it will be disbursing the next $410 million (Sh44.3 billion) before June 30 to help boost the public purse amid the Covid-19 pandemic.
Although he did not give details about the nature of credit expected from AfDB, Njoroge said the amount will contribute immensely to sealing the projected 5.2 per cent budget deficit for 2020/201.
Last year, the Pan African lender extended a €188 million (Sh22 billion) loan to Kenya to support the government's efforts to respond to the Covid-19 pandemic and mitigate the related economic, health and social impacts.
The apex bank said it was counting on those disbursements, recovering exports and diaspora remittances to boost the country's forex reserve which is currently at $7.4 billion (4.55 months of import cover).
''This will continue to provide adequate cover and a buffer against short-term shocks in the foreign exchange market and cushion the shilling from volatilities,'' Njoroge said.
Yesterday, the shilling gained slightly against major international currencies, trading at 107.57 against the greenback.
The new loan disbursements are coming despite immense pressure on the National Treasury to limit borrowing lest it plunges the country into a debt crisis.
On Wednesday, former Vice President and Amani National Congress (ANC) party leader said the Treasury should consider lean budgets going forward to evade tax for debt payment system.
The country's total public debt currently stands at Sh7.3 trillion and is expected to surge beyond Sh7.5 billion before the close of the current financial year.