Leveraging special drawing rights (SDRs) for sustaining economic recovery in Kenya
Kenya has faced and coped with multiple shocks amid reduced fiscal headroom and increasing public debt vulnerabilities.
Abstract
Kenya, like most countries in Sub-Saharan Africa, has faced and coped with multiple shocks amid reduced fiscal headroom and increasing public debt vulnerabilities. Other than the COVID-19 global health crisis and the resulting economic effects, Kenya faced the desert locust invasion in 2020, prolonged droughts in 2021 and 2022, and the accompanying high cost of living exacerbated by the spill over effects of the Russian-Ukraine war. These developments came when the economy had inadequate domestic resources to sustain the post-COVID-19 recovery momentum, and the mounting debt levels constrained the ability to raise new funding.
Following a series of recurrent shocks, the International Monetary Fund (IMF) supported member countries substantially. This support took multiple forms, including the Rapid Credit Facility (RCF), the Rapid Financing Instrument (RFI) and Resilience and Sustainability Trust (RST), which provided emergency loans to low income and middle income countries facing urgent balance of payments needs.
This research is part of the Capacity for Economic Research and Policy making in Africa (CERPA) programme.
Citation
Chemnyongoi H and Omanyo D. ‘Leveraging special drawing rights (SDRs) for sustaining economic recovery in Kenya’ 2024
Links
Leveraging special drawing rights (SDRs) for sustaining economic recovery in Kenya