The International Monetary Fund on Wednesday said its executive board has approved $739 million in emergency financing to help Kenya respond to the economic shock caused by the novel coronavirus pandemic.
The IMF said it was in close contact with Kenyan authorities and stood ready to provide policy advice and further support, as needed.
Kenya has 581 confirmed cases of the novel coronavirus and 26 deaths.
The virus has badly hurt major sectors such as tourism, horticulture and manufacturing.
“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.”
To limit the spread of the coronavirus, the East African country has suspended commercial flights in and out of the country, imposed a dusk-to-dawn curfew and banned public gatherings. It has also halted movement in and out of five regions most affected by the virus, including Nairobi, the capital.
The Finance Ministry forecasts 2020 economic growth will decline to 2.5% but may fall to 1.8%, compared with 5.4% growth in 2019, as a result of the outbreak.
The World Bank said last month that economic growth was expected to fall to 1.5% this year, and would contract 1% in the worst-case scenario under the impact of the outbreak.
The IMF forecasts growth of 1.0% this year for Kenya.
“Emergency financing under the RCF (Rapid Credit Facility) will deliver liquidity support to help Kenya cover its balance of payments gap this year,” the IMF said. “It will provide much-needed resources for fiscal interventions to safeguard public health and support households and firms affected by the crisis.