Kenya to receive Sh78.3bn from IMF to Address the economic impact of COVID-19

NAIROBI, Kenya, May 7 – Kenya will receive Sh78.3 billion after the Executive Board of the International Monetary Fund (IMF) approved the disbursement of funds, which will be drawn under the Rapid Credit Facility (RCF).

In a statement, the organization says the funds will help to meet Kenya’s urgent balance of payments need stemming from the outbreak of the COVID-19 pandemic.

IMF expects the impact of COVID-19 on the Kenyan economy to be severe, adding that it will act through both global and domestic channels, and downside risks remain large.

The funds come at a time when the sudden shock caused by the virus has left Kenya with significant fiscal and external financing needs.

IMF says the facility will help the authorities to address those needs and allow them to maintain an adequate level of international reserves and help provide the budget financing needed to respond to the pandemic.

IMF’s Deputy managing Director and Acting Chair Tao Zhang said the COVID-19 pandemic has delivered a large economic shock to Kenya and impacted nearly all facets of the economy—particularly tourism, transport, and trade—and led to urgent balance of payments and fiscal financing needs.

“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. It will also catalyze necessary financing from other donors,” he said.

Zhang advised Central Bank of Kenya (CBK) to 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.”