Exactly two days after the International Monetary Fund (IMF) approved the disbursement of Kshs 257 billion to Kenya, Kenyans took to Twitter in defiance of the constant loans by IMF.
Although the government pointed out that the loan will be used during the tough times as the country makes efforts to combat coronavirus, over 120,000 Kenyans engaged in an online appeal demanding a stop to the borrowing.
According to the Daily Nation, Kenya borrowed Kshs 971 billion between March and November 2020 in the fight against coronavirus. This is approximately at least Kshs 121 billion every month in the 8 months.
IMF approved a further Kshs 257 billion on Friday, for the equivalent option adding up the debt intensities to about Kshs 1.2 trillion within the year.
Meanwhile, Kenya has pushed the International Monetary Fund (IMF) to moderate relations involved in its loan support programs. “IMF flexibility is vital in the current environment when negotiating a program. Program conditionality has to be realistic, monitorable and country-specific. Without this, countries find themselves in endless and sometimes non-productive with the funds, which can also have adverse market implications if markets think there is a problem,” National Treasury Cabinet Secretary Ukur Yatani said.
Yatani has reviewed that the IMF should support member countries with debt restructuring to guarantee the procedure’s relevance and economics.
“Supporting member countries efforts to deal with debt restructuring in an effective and timely manner is also critical. As recent experiences show, debt restructuring can be protracted, time-consuming and expensive if the country has to hire debt advisors,” he stated.
Kenya’s access to IMF financing has been tangled to harsh native modifications, required by the Fund as well as increasing tax revenues and obligating to financial partnership inclusive of the ongoing State Corporations restructure.
However, the country’s consultations with the IMF for emergency finance have emerged successful with Kenya having received a Kshs 255.1 billion ($2.34 billion) 38-month loan program on Friday adding to a Kshs 80.6 billion ($739 million) loan received in May 2020.
The IMF support is anticipated to be vital for Kenya as it strives for a return to the independent bond markets later this year. Kenya looks forward to drawing a combined Kshs 248.1 billion by June next year through the issue of a Eurobond.
By Everlyne Bosibori