NAIROBI, Kenya, April 5 – A section of MPs allied with Vice President William Ruto has called for mitigation measures for residents of the five counties currently stranded due to the COVID-19 pandemic.
Led by Kikuyu MK Kimani Ichungwah, former chairman of the National Assembly’s budget committee, lawmakers urged the government to use the recently approved 257 billion shillings loan from the International Monetary Fund to support the groups most affected, especially small businesses.
Nakuru Senator Susan Kihika and Dagoretti South MP John Kiarie were also present at the press conference.
“The situation on the ground is different. Things on the ground are difficult for our people. Immediate and urgent measures must be instituted and all efforts and energies must be redirected towards this devastating situation that our people are facing, ”Kihika said.
“Failure to react to the situation will be tantamount to fueling the anger and despair that is boiling among the population. A situation which can only be catastrophic for our beautiful nation. ”
Kihika urged the government to institute urgent measures that will protect Kenyans from an economic crisis caused by the pandemic and made worse by some of the containment measures.
The situation is even precarious for the zoned counties of Kajiado, Kiambu, Machakos, Nakuru and Nairobi, where the president has ordered bars to close while restaurants only offer take-out services.
“In order to meet the strict IMF conditions attached to these loan approvals, it is imperative that the country embark on an aggressive fiscal consolidation program driven by income growth in order to sustainably manage both the level of debt and debt servicing capacity, ”lawmakers said. said in a joint statement.
“We strongly believe that this will only be achievable through expanding our taxes and not overtaxing the existing tax base.”
The National Treasury said the newly acquired facility, which falls under the IMF’s Extended Credit Facility and Extended Funding Facility, includes an initial disbursement of 79 billion shillings, which is expected to be released on June 30, 2021.
The Treasury further revealed that a total of 33.7 billion shillings would be released immediately and would be available for budget support.
Commenting on the approval of the facility, Deputy Managing Director and Acting IMF President Antoinette Sayeh said the facility will also be used to safeguard resources to protect vulnerable groups.
Sayeh said the COVID-19 shock exacerbated the country’s pre-existing fiscal vulnerabilities, but said its debt remained sustainable.
She warned, however, that Kenya is at high risk of debt distress.
“To address debt risks, the authorities have taken measures to maintain the budget deficit and debt ratios at 8.7 and 70.4 percent of GDP, respectively, during this fiscal year. The financing needs of public finances and the balance of payments remain significant in the medium term, ”she declared.