This archive report was first published on 7 May 2020.
On May 7, 2020, the International Monetary Fund (IMF) approved a Sh79.3 billion loan to Kenya to help the country combat the Covid-19 pandemic.
The loan, which is the second significant credit facility received from a Bretton Woods institution in the last two months, will help Kenya meet its urgent balance of payments needs stemming from the outbreak of the Covid-19 pandemic.
According to the IMF, the impact of Covid-19 on Kenya's economy will be severe, with the lender stating that it will act through both global and domestic channels, but downside risks remain large.
IMF Deputy Managing Director and Acting Chair Tao Zhang noted that the pandemic has delivered a large economic shock to Kenya, impacting nearly all facets of the economy, particularly tourism, transport, and trade.
"Emergency financing under the RCF will deliver liquidity support to help Kenya cover its balance of payments gap this year. It will provide much-needed resources for fiscal interventions to safeguard public health and support households and firms affected by the crisis," Zhang said.
The IMF loan comes at a time when concerns have been raised over how Covid-19 funds are being used in Kenya. To address these concerns, Kenyan authorities plan to conduct independent post-crisis auditing of coronavirus-related expenditure and publish the results.
