The International Monetary Fund has approved Sh78.4 billion ($739 million) emergency loan to help Kenya cushion its economy from the shock caused by the Covid-19 pandemic.
According to Reuters, the IMF said that it stands ready to provide policy advice and other support if needed.
So far, Kenya has 582 Covid-19 cases, with two key markets in its two cities having been put on lockdown to curb the spread of the novel coronavirus.
“The impact of COVID-19 on the Kenyan economy will be severe. It will act through both global and domestic channels, and downside risks remain large,” the IMF said in a statement.
“While the authorities have taken decisive action to respond to the pandemic’s health and economic impacts, the sudden shock has left Kenya with significant fiscal and external financing needs.”
Besides locking down Nairobi’s Eastleigh and Mombasa’s Old Town busy markets, Kenya has like many other countries suspended commercial flights in and out of the country, placed a partial lockdown on the Nairobi Metropolitan Area and four other regions hit by the virus.
Public gatherings and a dusk-to-down curfew have also been imposed, dealing a blow to vital social activities that contribute to the economy such as weddings and night businesses such as night clubs.
Kenya’s Treasury Cabinet Secretary, Ukur Yatani, projected that the economic growth would decline to 2.5% but may still fall further down.
The economy in 2019 grew by 5.4%.