Why Kenyans are petitioning IMF to cancel over $2B loan to government

Abu Mubarik Apr 8, 2021 at 08:17am

April 08, 2021 at 08:17 am | News

Abu Mubarik

Abu Mubarik

April 08, 2021 at 08:17 am | News

Kenyan President Uhuru Kenyatta. Pic Credit: PML Daily

Thousands of Kenyans have taken to social media to protest a $2.3 billion loan advanced to the country by the International Monetary Fund (IMF) saying the country is already overburdened with loans.

Some also took to change.org to sign a petition urging the IMF to cancel the recently approved loan as previous disbursements have been lost to corruption and scandals. The petition has generated over 160,000 signatures

The change.org petition was led by one Jefferson Murrey who says a majority of Kenyans are against President Uhuru Kenyatta administration’s huge appetite for heavy borrowing without proper accountability.

“This (petition) 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. 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 cost of basic commodities such as fuel skyrocketing, and nothing to show for the previous loans,” Murrey, the organizer of the petition, said.

Since March 2020, Kenya has borrowed $8 billion to fight COVID-19, according to the Daily Nation newspaper, one of the most read newspapers in East Africa. As of June 2020, Kenya’s public debt stood at KSh 7.06 trillion ($65 billion), 65% of gross domestic product (GDP), Tuko reports, citing the country’s 2021 budget policy statement.

Kenya’s Auditor Service noted in a report on the disbursement of COVID-19 funds that some $23 million was lost in procuring Covid-19 medical supplies at the Kenya Medical Supplies Authority (KEMSA).

“Stop lending money to [the] Kenyan government. It ends up in few corrupt pockets. No change in living standards to the common citizens. We are becoming poorer and poorer. Heavy taxes levied on our meagre salaries. Reverse the loans. We don’t need it,” a social media activist posted.

“Why are you approving loans to this irresponsible government of Kenya? You are sinking our economy deeper,” another angry Kenyan queried.

Despite the opposition to the loan, Treasury Cabinet Secretary Ukur Yatani defended the borrowing, citing dwindling funds occasioned by COVID-19. The IMF also defended the disbursement of the loan, saying that Kenya has demonstrated “a strong commitment to fiscal reforms during this unprecedented global shock, and Kenya’s medium-term prospects remain positive.”

The first tranche of the disbursement is expected to hit Kenya’s national treasury soon while the second tranche will be released by the end of June.

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