Debt Trap: Kenyans sign petition to stop US$2.34 Billion IMF loan

A group calling itself, the “Concerned Kenyan Citizens” has initiated an online petition demanding that, financial watchdog, the International Monetary Fund (IMF) rescind its decision to loan an amount of US$2.34 Billion to the Kenyan government.   

This follows an earlier announcement by the IMF’s Executive Board on April 2, 2021, regarding the approval of a 38-month arrangements under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) for Kenya which is already debt distressed.

The group stated that, “the revelations that the IMF has recently approved a Kshs.255 billion loan to the Kenya government has left many Kenyans stunned and appalled. This is in recognition of the fact that previous loans to the Kenya government have not been prudently utilized and have often resulted in mega corruption scandals.”

They added in the petition which has gathered almost 20,000 signatures that, the mismanagement of the numerous loans taken by the government only trickle down as burdens for the citizens as they are heavily taxed to generate revenue for the state.

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“The scandals have not deterred the ruling regime from more appetite for more loans, especially from China. Right now Kenyans are choking under the heavy burden of taxation, with the prices of basic commodities such as fuel skyrocketing, and nothing to show for the previous loans.” The group said.

They finally demanded a reconsideration and suspension of the loan by the IMF. “We are therefore calling on the IMF to suspend the disbursement of the loan package it recently approved until proper accountability mechanisms to ensure it will be prudently managed and accounted for are put in place.” The group said, adding that “the IMF can, and should, do the right thing.” By revoking the loan.

It is estimated that, the east African country will be facing US$2.6 billion in sovereign external debt servicing in 2021 and US$3.6 billion in 2022. The government expects to make use of the IMF support, a US$1 billion World Bank loan coupled with a Eurobond issuance in 2021 and 2022 to service the aforementioned debts.

Kenya has been in the news in recent times following reports of a potential takeover of its Mombasa Port by the Chinese government due to a debt default. An earlier audit report prepared by the country’s former Auditor General as intercepted by EYEGAMBIA stated that, “KPA assets are exposed to the risk of takeover by the lender” which is China. The Chinese SGR loan is due for payment but Kenya’s economy does not seem healthy to pay the loan which is to be repaid in 30 instalments.

Do you support the call by the Concerned Kenyan Citizens for the IMF loan to be cancelled? Let us have your views in the comment section.

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