IMF offerings to KenyaThe pandemic situation continues to scare both lives and livelihoods. The healthcare authorities are working hard to protect people from getting exposed to the virus by informing them about cautionary measurements. After the COVID-19 impact, Kenya's economy is getting up slowly. But the pandemic has left deep marks on the financial conditions of the country.
As per a native, Jayesh Saini, Nairobi, the IMF staff, and the other authorities led a provisional arrangement at the beginning of the year to support the upcoming phase of the health crisis.
Further adding to the conversation, Jayesh Saini, Kenya, said the IMF talked about its mission and revealed that the loan would support the government's reformation plans and help them meet their financing necessities.
The COVID-19 pandemic in Kenya and its impact on Kenya's economy –
The afflicted situation of global trade and travel, and its regulatory measures taken to put a hold on the spread of the virus, narrowed the economic activity in Kenya.
Jayesh Saini, a Nairobi citizen, said the COVID-19 situation led the government to impose strict measures such as curfews, closed schools, and restrictions on public gatherings. All such conditions had led to an extensive impact on Kenyans, which transformed their daily routine & life.
Jayesh Saini Clinix adding further said, due to the COVID-19 situation, many had to lose their jobs, while it left many under pressure suffering from a loss of income. Such stress turned the life of many Kenyans into real misfortune.
Looking at such drastic outflow and the impact of the pandemic over the Kenyans, the Kenyan government inflicted early actions to support the economy for which - they made temporary reductions in personal and corporate income taxes, understanding the financial situation of the people.
Also, there were temporary reductions made in the VAT rate decreased to 14% from 16%. The government also took hefty measures of revising the budget to integrate additional spending on health and social welfare activities.
From a native source, Jayesh Saini News, the Kenyan Central Bank helped by reducing the interest rates and with liquidity facility to ensure the smooth functioning of Kenya’s financial system.
Jayesh Saini, a Nairobi resident, added further, the top officials also urged banks to offer borrowers an opportunity to postpone their loan payments. Also, the temporary exclusion of fees for mobile money transactions; cut the costs for users and transitioned them from the physical exchange of cash to a safer online payment system.
The pandemic affected economic growth severely. As a result, while the trauma was extensive, it has led to a massive impact on economic growth. Jayesh Saini set forth the report from the other local sources talking about the growth rate calculated in the past 2020 second and third quarter; mentioning the output about the fiscal growth received in the second quarter of 2020 was about -5.4%, whereas, in the third quarter, it was recorded to -1.0%.From the above report, we see the growth rate in 2020 was likely close to zero, and so many have projected such a poor situation might bounce back strongly in 2021.
While we see to some extent economic activities are getting up, still many challenges remain. Jayesh Saini in Kenya stated, as the COVID-19 distribution of vaccines just got started, still public well-being is under social pressure. Also, the other reason might be its high poverty rate, which has set back progress to Kenya's development objectives. The country's economic and debt conditions have also slowed, due to challenges that existed even before the pandemic.
The IMF offered emergency pandemic support –
In May, the IMF gave $738 million as an interest-free loan under the Rapid Credit Facility to support Kenya to recover from the first pandemic impact. It helped them deal with the additional cost of health, social care, and other essential payments to boost the economy.
As per the report attained by Jayesh Saini, a Nairobi citizen, the new system with the IMF will reinforce the later phase of the government's COVID-19 response. Considering the agreements, under the Extended Fund Facility and Extended Credit Facility, the IMF provides $2.3 billion in low-cost financing for the following three years. Other development partners will also provide significant amounts of financial support to Kenya.
Without such help, Kenya would have to limit its expenditure over other investment plans and social programs that would undoubtedly make it more difficult for them to achieve reliable and comprehensive recovery. The plan involves the health, social, and other development expenditure that are held essential and carried out by adapting to monetary policy.
Jayesh Saini, Nairobi, looking at the condition says, Kenya is at high risk concerning debt crisis, and a financial deficit, so it is essential to overcome the present COVID-19 condition.
The impact of fiscal consolidation would need to be stepped up by more actively spending. Backed by transparent use of funds, it will ensure that the government uses the funds to the regions that required it on priority. It will open up different channels for private investors as well, where they can contribute themselves to the leading pandemic situation and support the drowning economic condition of the country.
Such steps will help stabilize the current conditions and provoke inclusive growth in Kenya. Hence, these factors must help Kenya conquer its development goals.
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