The International Monetary Fund (IMF) has issued a statement following the decision by President William Ruto to dissolve his Cabinet.
IMF on Thursday July 11 announced it will 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.
The Fund’s Director of Communications and spokesperson Julie Kozack made the announcement while addressing the press stating that the Monetary Fund will include the assessment report in its ongoing program reviews with the country.
According to the spokesperson, the ongoing reviews will grant the Fund an opportunity to adjust its fiscal recommendations in favor of Kenya.
Kozack further disclosed that the adjustments will be based on the evolving situation in Kenya which include the withdrawal of the Finance Bill 2024 occasioned by deadly nationwide demonstrations.
IMF position on Kenya
“At every program review we do take the opportunity to assess developments and make adjustments considering the evolving circumstances,” Julie Kozack stated in a press briefing.
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She highlighted that these policies go through a process of broad consultation so they can gain public support.
“And that’s exactly what we’re doing in our active and constructive discussion with the Kenyan authorities on their proposed policy package, with the aim of addressing the country’s economic challenges effectively.
We remain committed to help Kenya establish sound macroeconomic fundamentals, crucial for sustainable growth and job creation, especially for the country’s young people,” she added.
While extending the IMF’s deepest sympathies to the people affected by recent events in Kenya, Kozack highlighted that the Fund prioritizes safeguarding social programs and protecting the most vulnerable members of society
Kenya Funding 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 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 Fund Facility (EFF) and the Extended Credit Facility (ECF) arrangements was approved by the IMF Executive Board on April 2,2021.
Initially approved for 38 months, the program was then 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 Fund, this helped alleviate market concerns which allowed Kenya to access the bond market and partially roll over the maturing Eurobond.
The statement from IMF came a week after President Ruto held a phone conversation with the Fund’s chief, Kristalina Georgieva.
Ruto and Kristalina discussed several issues regarding the withdrawal of the controversial Finance Bill 2024.
The Monetary Fund maintained that it remains committed to supporting Kenya’s efforts to achieve inclusive and sustainable growth and to improve the living standards of its citizens.
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