Kenya Seeks $500 Million in Funds to Ease Crisis

Kenya is seeking $500 million in funds to help cushion the economy after the global economic crisis cut exports and foreign investment, Prime Minister Raila Odinga said. The funds are over and above the $200 million loan that Kenya has obtained from the International Monetary Fund, Odinga said in an interview in Cape Town yesterday, where he was attending the World Economic Forum on Africa. The global recession has curbed Kenya’s foreign currency earnings as exports fell and remittances from Kenyans living abroad declined. Foreign currency reserves of about $2.6 billion cover three months of import needs, compared with the government’s target of four months, Scott Rogers, the IMF’s senior representative in Kenya, said on May 29. “We are hoping we will get more support at this very critical moment to be able to bridge the gap,” Odinga said. “We seek particularly balance of payments support, which will help us to import” food and other goods. Kenya has approached the African Development Bank and potential donors such as the European Union to help plug the funding gap, Odinga said. The government would prefer not to raise the money through domestic borrowing because that would have “negative” consequences for interest rates on government debt, he added. Read more.