The International Monetary Fund (IMF) has announced that it has sent its members to Kenya for a special visit.
IMF Director of Communications and spokesperson Julie Kozack on Thursday, September 13, revealed that part of its staff is currently in Kenya for a fact-finding mission.
Kozack said that the mission is part of its ongoing and constructive dialogue with the Kenyan government to find a balanced path forward on the economic challenges being faced by the country.
The spokesperson was answering a question on the decision the IMF aims at making following the Kenyan government’s move to ask for input on the economic agenda from members of the public.
Kozack was further asked to explain the impact IMF’s financial assistance to Kenya will have on the Kenyan government.
“Right now, there is an IMF staff visit in Kenya. This is a fact-finding mission & is part of our ongoing and constructive dialogue with the Kenyan authorities to find a balanced path forward & we’ll provide further updates after the visit concludes,” said Kozack.
The IMF spokesperson, in her response, said that Kenya’s situation does reflect broader challenges that are facing many countries in Sub-Saharan Africa.
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She highlighted that the region is experiencing a significant funding squeeze due to tighter global financial conditions and the reduced availability of concessional financing, further saying that policymakers in the region, including in Kenya, face a complex balancing act.
IMF Speaks of Situation in Kenya
Kozack further warned that there are pressing spending needs in some priority areas, such as social programs, health and education in Kenya.
“They also have to manage rising public debt, and they’re also looking to boost their own domestic revenues. For Kenya, the goal of the program is to help establish sound macroeconomic fundamentals, which we see as crucial for fostering sustainable and inclusive growth, as well as for generating jobs, especially for young Kenyans,” said the IMF Spokesperson.
According to Kozack, the IMF program includes initiatives aimed to improve governance and transparency and to ensure the proper use of public funds.
Kozack, however, highlighted that it is important that these policies go through a process of broad consultation.
She further maintained that the Fund is currently working with the authorities to ensure that the objectives of the program can be met.
Program
The IMF program was expected to provide about one-third of the government’s budgeted net external financing or $976 million (Ksh124 billion) in external funding in fiscal year 2025.
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Kenya’s IMF-supported program also includes reforms to improve governance, transparency, and responsible use of public funds.
The reform program supported by the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) arrangements was approved by the IMF Executive Board on April 2,2021.
The program, which was Initially approved for 38 months, was extended by 10 months on July 17, 2023.
In view of exceptional balance of payments pressures, a further augmentation of about $941 million was approved in January 2024, bringing total IMF funding under the program to about $3.9 billion (Ksh504 billion).
According to the IMF, this helped alleviate market concerns which allowed Kenya to access the bond market and partially roll over the maturing Eurobond.
Cabinet Dismissal and Ruto’s call with IMF chief
The remarks by IMF’s Kozack came months she issued a statement in July following the decision by President William Ruto to dissolve his Cabinet.
IMF on Thursday, July 11, announced it would embark on assessing Kenya’s recent developments which saw Attorney General Justin Muturi and all Cabinet Secretaries (CS) except for Prime CS Musalia Mudavadi, dismissed.
Julie Kozack made the announcement while addressing the press stating that the IMF will include the assessment report in its ongoing program reviews with the country.
According to the spokesperson, the ongoing reviews were meant to grant the multilateral lender an opportunity to adjust its fiscal recommendations in favor of Kenya.
President Ruto had also in July held a phone conversation with the IMF’s chief, Kristalina Georgieva where they discussed several issues regarding the withdrawal of the controversial Finance Bill 2024.
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