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US$2.34 Billion loan: IMF responds to agitation by Kenyans; set stricter terms for authorities.

Financial watchdog, the International Monetary Fund (IMF) has acknowledged series of agitations by Kenyan citizens demanding the suspension of a loan amount of US$2.34 Billion to the Kenyan government.

“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.” kenyan activist group said in a petition which has so far gathered over 200,000 signatures. 

In a recent publication released on April 6th, 2021 in which the IMF was responding to frequently asked questions on Kenya, including: “Does it make sense for the IMF to lend to Kenya and increase its debt burden when the country is already at high risk of debt distress?,” the financial watchdog made certain revelations.

The IMF revealed that, it has demanded certain commitments from the Kenyan authorities as condition for the loan which will seal corruption loopholes as has been the worry of the agitating youth.

The financial body has demanded a review of the current legal framework for asset declarations of senior public officials and conflict of interest rules. 

In order to promote fiscal transparency, the IMF is demanding that, the authorities should publish procurement information including beneficial ownership data of companies that are awarded contracts. Additionally, the authorities must publish an audit of all COVID-19 related expenditures in FY19/20. 

On whether the loan under discussion makes economic sense, the IMF said the focus is on a strong multi-year effort to reduce debt and debt vulnerabilities whilst laying foundations for durable and inclusive growth over the years to come.

“The USD 2.34 billion EFF/ECF arrangements with the IMF together with additional financing from development partners and capital markets and G-20 support under the Debt Service Suspension Initiative (DSSI) will help meet Kenya’s significant medium-term financing needs including to support their COVID-19 response.” The IMF added.

Meanwhile, disgruntled Kenyans are still flooding official social media platforms of the IMF with series of messages centered on the fact that, they (the youth) will not be liable for any future debt if the loan is mismanaged.  The current hashtag trending on this development is #StopLoaningKenya.

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