Why IMF canceled Ksh 131B fund for Kenya days before disbursement; Ambassador Whitman
Ambassador Meg Whitman explains why the IMF canceled the Ksh 131B fund for Kenya days before disbursement
Ambassador Meg Whitman explains why the IMF canceled the Ksh 131B fund for Kenya days before disbursement.
The US Ambassador to Kenya Meg Whitman on Tuesday disclosed that the International Monetary Fund (IMF) cancelled the Ksh131 billion disbursement for Kenya after President William Ruto withdrew the Finance Bill.
Whitman, who spoke during an interview on Citizen TV, revealed that the loan approval that was to happen on June 12 was canceled because the government went against the Fund’s agreement when it withdrew the piece of legislation.
The US ambassador, however, noted that despite the failed disbursement, there was still a possibility of Kenya accessing the loan following the upcoming meeting set to happen at the end of August this year.
According to her, it was important for the IMF to disburse the funds because of the country’s current debt challenges.
“The IMF was going to approve a disbursement around June 12 but when the Finance Bill got pulled down, they could no longer do it,” Meg Whitman noted.
“I believe it is important for that disbursement to be given out because Kenya faces a very difficult situation,” the US ambassador added.
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The US ambassador, while addressing the matter, called on President William Ruto’s administration to similarly come up with measures that would help address the current fiscal challenges facing the country.
According to Whitman, the percentage of the Kenyan budget that went into interest and principal payments had immensely increased and the measures offered by the IMF were ideal to solve the crisis.
“Every African country and Kenya faces a difficult situation a lot of debt was taken when the interest rates were nearly zero. I think Kenya’s number one priority is not to default which is very wise,” Whitman stated.
Kenya was set to receive the Ksh131 billion in June after it reached a staff-level agreement with the Fund following the completion of the programme’s seventh review.
The multi-billion loan was expected to be the largest disbursement by the multilateral lender since 2021. So far Kenya has received Ksh 341 billion from IMF under the extended fund facility agreement.
IMF’s disbursement was meant to help Kenya address its fiscal constraints and narrow the country’s budget deficit which stands at Ksh500 billion.
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