WASHINGTON – The International Monetary Fund (IMF) yesterday approved a US$2.34 billion (RM9.69 billion) aid package to Kenya to “address the urgent need to reduce debt vulnerabilities”, said the institution in a statement.
The Washington-based development lender said the funds will be spread over 38 months, with an immediate disbursement of US$307.5 million, “usable for budget support”.
“Kenya was hit hard at the onset by the Covid-19 pandemic,” said IMF, highlighting the country’s “forceful policy response” leading to an economic recovery this year after a slight contraction in gross domestic product in 2020.
But, the crisis has also exacerbated “pre-existing fiscal vulnerabilities”.
“Kenya’s debt remains sustainable, but it is at high risk of debt distress,” said the statement, adding that “fiscal and balance-of-payments financing needs remain sizeable over the medium term”.
IMF deputy managing director Antoinette Sayeh called the aid “a strong signal of support and confidence”, but noted that it is “subject to notable risks, including from uncertainty about the path of the pandemic”. – AFP, April 3, 2021
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