DEBT DILEMMA

Debt: Another bittersweet $244m IMF loan to Kenya

By Herald Aloo

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Posted on May 11, 2022 13:52

 © Motorists queue for fuel at the Rubis fuel station, amid the nationwide petrol and diesel shortage, in the central business district of Nairobi, Kenya April 13, 2022. REUTERS/Thomas Mukoya
Motorists queue for fuel at the Rubis fuel station, amid the nationwide petrol and diesel shortage, in the central business district of Nairobi, Kenya April 13, 2022. REUTERS/Thomas Mukoya

Kenya is set to receive another $244m (KSh28bn) from the IMF in a loan deal laced with tough conditions that will see its citizens grapple with hard-hitting structural reforms and prompt job losses.

The loan is part of the $2.34bn Special Drawing Right (SDR) approved in April 2021 on the condition that Kenya keeps in check its expenditure and huge debt, which is currently in excess of KSh8.2tn ($70.7bn), equivalent to 70% of GDP.

“Upon completion of the Executive Board review, Kenya would have access to SDR179.13m (equivalent to about $244m),” IMF Mission Chief to Kenya Mary Goodman said in a statement.

The $244m loans, which according to the IMF now bring the total amount loaned under the program so far to about KSh135bn ($1.17bn), are meant to help the country weather rough economic terrain. The last tranche, which was issued in May 2021, was $410m.

However, given Kenya’s limited fiscal space, the loan is dependent on tough measures to keep the country’s expenditure under control.

Conditions

Part of the conditions of the IMF loan is that the government is required to limit its

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