During the meeting, CS Yatani highlighted IMF’s support in helping Kenya mitigate the effects of the Covid-19 pandemic as well as address structural reforms noting, including a request to suspend debt repayment to cushion the economy against the current debt vulnerabilities.
Earlier in the year, Kenya had secured a six-month debt suspension deal from the Paris Club of international creditors under the Debt Service Suspension Initiative.
Yatani also commended the IMF on the recent approval of the Ksh255 billion loan by the IMF executive board.
“We note with appreciation, the Executive Board’s approval of Kenya’s funding request which will not only strengthen our response to the Covid-19 pandemic but also help us reduce our debt vulnerabilities through revenue fiscal consolidation, as well as address structural and governance weakness,” he stated.
The bilateral meeting also focused on three key areas: Kenya’s economic performance during the pandemic, preparations for the World Bank’s third Development Policy Operation for Kenya and the push for an extension to the Debt Service Suspension Initiative (DSSI).
Yatani noted that major sectors adversely affected by the pandemic such as transport, education, trade, tourism and manufacturing, still registered an overall growth of 0.6 percent on the back of a strong performance by the agricultural sector.
He further told the IMF Africa director that the country’s economy is expected to grow by seven percent in 2021 on account of the resumption of international trade, strategic investments in the Big Four Agenda, stable inflation as well as credit guarantee scheme for small and medium-sized enterprises (SMEs).
The Treasury CS also highlighted four major sectors expected to undergo reforms to achieve inclusive growth. Among these sectors include the electricity sector, human capital, natural capital and fiscal reforms.
The news comes as the majority of Kenyans have raised concerns regarding the rising debt crisis alluding to the recent approval of the Ksh255 billion IMF loan.
An unofficial petition urging the international body to cancel the loan approval has seen over 250,000 Kenyans sign the petition.