Kenya has fulizad sh255 billion

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Treasury Cabinet Secretary Ukur Yatani has defended the Sh255 billion the country from the International Monetary Fund.

Kenya seeks to use the cash, which the first batch of Sh34.5 billion is expected this week, to support the next phase of Covid-19 response.

In a proposal to the Bretton Woods institution, Yatani said the effects of the pandemic and restoring the economy would require significant additional cash.

The CS said the country is faced with the dilemma of meeting the citizens’ basic needs – including vaccinations, and maintaining macroeconomic stability.

In this regard, Yatani said the priority remains saving lives and livelihoods through increased spending on health and safety nets.

Yatani said the new loan facility expected from IMF is was part of his fiscal strategy to abandon commercial loans.

“Equitable and affordable access to the vaccine is critical and help from the international community are urgently required,” the CS said

The IMF board approved the country’s request on Friday.  The cash is expected to stabilize debt levels.
The CS said the monies would help mitigate ‘the devastating effects of Covid-19 and set the stage for economic recovery.

The Treasury boss said concessional loans would be the best way to go about meeting budget deficits to keep the country afloat.

Curfews and restrictions on public gatherings have caused massive job losses and consequently cuts in national revenue earnings.

Yatani said the additional support will help provide liquidity to small businesses “to forestall a greater humanitarian crisis.”

Without the support, the country would have had to cut spending on investment and social programs, IMF said.

The Treasury also wants the consolidation period for the Debt Service Suspension Initiative (DSSI) extended for a further one year to June 2022.

He said the move will yield additional external resources, addressing debt vulnerabilities, and providing liquidity.

He justified the engagement with the IMF citing countries’ declining ability to carry additional debt, with a weaker outlook on economic growth.

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