This archive report was first published on 11 May 2020.
On May 11, 2020, the International Monetary Fund (IMF) announced that it had extended $1.2 billion in emergency funding to Kenya and Uganda to help the two countries respond to the COVID-19 pandemic.
The funding, which was disbursed under the Rapid Credit Facility, will provide Kenya with $739 million to help it meet urgent balance of payments needs stemming from the pandemic. The Kenyan facility carries a zero per cent interest rate, a grace period of 5.5 years, and a final maturity of 10 years.
Uganda is set to receive $491.5 million to finance health, social protection, and macroeconomic stabilization measures, as well as address balance of payments and fiscal needs.
According to Tao Zhang, IMF deputy managing director, the COVID-19 pandemic has delivered a large economic shock to Kenya, impacting nearly all facets of the economy and leading to urgent balance of payments and fiscal financing needs.
He added that the financing will deliver liquidity support to help Kenya cover its balance of payments gap and provide resources for fiscal interventions to safeguard public health and support households and firms affected by the crisis.
As of May 6, 2020, Kenya had witnessed a significant surge in COVID-19 cases, with 582 confirmed cases, 26 deaths, and 190 recoveries. In Uganda, the total positive cases stood at 100, with 55 recoveries.
The pandemic has had adverse impacts on key sectors of the economy, particularly trade, tourism, transport, construction, manufacturing, and agriculture. It has also curtailed remittances and foreign direct investments, weakened economic conditions, and exerted significant pressure on revenue collection, expenditure, reserves, and the exchange rate.
