• IMF said it is in close contact with the Kenyan authorities and stands ready to provide policy advice and further support.
• The board said that the amount will help the country to meet urgent balance of payments need stemming from the outbreak of the pandemic.
Image: COURTESY
Kenya is set to benefit from the International Monetary Fund during this novel coronavirus which has crippled the economy.
The IMF Executive Board on Wednesday approved Sh78,371,263,871 emergency financing to Kenya which is meant to help the government in responding to the affected economy.
IMF said it is in close contact with the Kenyan authorities and stands ready to provide policy advice and further support.
The board said that the amount will help the country to meet urgent balance of payments need stemming from the outbreak of the pandemic.
It said that the country suffered a huge blow from the pandemic living it with significant fiscal and external financing needs.
IMF Deputy managing Director and Acting Chair to the Board Tao Zhang said during the conclusion of the board discussion that the Covid-19 has delivered a large economic shock to Kenya.
Treasury CS Ukur Yatani welcomed the development saying it was a mark of confidence on the country’s commitment.
"We thank IMF Board for their confidence in our policy measures despite the difficult times occasioned by the Covid-19 pandemic,” Yatani told the Star.
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.
“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," Tao Zhang said.
He added that “A pause in the authorities’ fiscal consolidation plans to accommodate Covid-19 related measures is appropriate. These measures should be temporary and well-targeted. Once the crisis abates, it is critical that the authorities resume their pursuit of a growth friendly medium term fiscal adjustment, including raising revenues as a share of GDP, to reduce debt vulnerabilities."
He said that the Central Bank of Kenya (CBK) has taken various measures to maintain sufficient liquidity in the financial sector.
Tao Zhang further said that CBK should continue to stand ready to further support the economy and the financial sector’s health, as necessary, while ensuring that policy decisions are data-driven.
"The CBK should also continue to allow the exchange rate to act as a shock absorber," Tao Zhang said.
According to Tao Zhang, the government of Kenya promised to carry out independent post-crisis auditing to ensure that Covid-19 resources are used well.
President Uhuru Kenyatta had said earlier that his administration has stepped up measures which will ensure that the economy will be restored.
The president has said that the government had discussion with international many lenders and other stakeholders regarding the economy of the country.