. . World News – CA – Kenya Seeks Three And A Half Year Access To IMF Emergency Loans – Citizentv. co. ke

Kenya is in intensive talks with the International Monetary Fund (IMF) about access to rescue credits for emergencies in the next three years, the institution has disclosed.

In a statement released on Friday evening after a three-week virtual meeting, the IMF said there was broad agreement on key principles for Kenya’s access to emergency funds.

“There is broad consensus on the key principles a Fund-backed program could use to support the next phase of the country’s COVID-19 response and strong multi-year efforts to stabilize and reduce debt. The discussions will continue in the coming period, ”declared the IMF.

The new funding, accessed through the IMF’s Extended Credit Facility (ECF), which provides assistance to countries with protracted balance of payments problems, is expected to aid the country’s next phase of the COVID-19 response.

As the IMF notes that the Kenyan economy has recovered from the profound disruptions in April and May, the multilateral lender alike notes that the normally resilient service sector continues to face challenges and the outlook remains uncertain.

“The program would provide resources to protect vulnerable groups and reduce vulnerability to debt over time through multi-year fiscal consolidation focused on increasing tax revenues. It would also advance the structural reform and governance agenda and remove weaknesses in some state-owned companies exacerbated by the COVID-19 shock, ”stated Mary Goodman, IMF staff member in Kenya’s Virtual Mission.

“Ultimately, it would strengthen the monetary policy framework and support financial stability. The program design would include elements of flexibility to accommodate the high level of uncertainty about the development of COVID-19 and the path to economic recovery. ”

The team, which is meeting with key financial and monetary agents such as Finance Cabinet Secretary Ukur Yatani and Central Bank Governor of Kenya (CBK) Patrick Njoroge, noted the forthcoming results before finalizing the ECF agreement.

This includes the extent of the weaknesses in state-owned enterprises (SOEs), budget revisions for 2020/21 and some elements of Kenya’s medium-term strategy.

However, the IMF has not disclosed the terms attached to Kenya’s access to the emergency loans amid controversy in which Treasury Secretary Ukur Yatani denounced the facility’s linkage to a Debt Service Suspension Initiative (DSSI). .

On Wednesday, CS Yatani told Reuters that Kenya had turned around and was now willing to participate in the G20’s coronavirus debt relief initiative, which Ksh would postpone. 75. Debts of 6 billion. USD (690 million. USD).

It has been reported that both the IMF and the World Bank are the driving force behind Kenya’s reversal, as its participation in the DSSI is seen as a requirement for access to emergency credit.

Treasury Department CS Ukur Yatani, however, fought the reports calling them allegations in a statement released Friday afternoon, despite admitting he was in advanced talks with the IMF about a policy to anchor growth spike.

“Kenya did not apply for the G20 DSSI. Some countries have faced the challenge of realigning debt servicing on creditors with undesirable outcomes. In this regard, Kenya is taking a cautious approach to assessing the costs and benefits of the offer and making an informed decision to ensure the country’s economic and financial performance, ”he said.

The DSSI refers to a program whereby official bilateral creditors suspend debt service payments from the poorest countries – a list that includes Kenya with an initial timeframe of June 2021.

The program is viewed as a program that enables low-income countries to focus their resources on fighting the pandemic.

Kenya has turned to multilateral lenders to fund its growing budget deficit during the pandemic and received Ksh. 78 billion ($ 739 million) and Ksh. $ 107 billion ($ 1 billion) from the IMF’s Quick Loan Facility (RCF) and World Bank Development Program (DPO) operations earlier this year.

Kenya plans to take out another Ksh. 150 billion ($ 1). 4 billion. ) Loan from the World Bank’s Data Protection Officer before the end of June 2021.

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Kenya, International Monetary Fund, Finance, Government, Ukur Yatani Kanacho