The Chairperson of the Presidential Council of Economic Advisors, David Ndii, has responded to Kenyans asking when things will get easier.
Speaking during the NCBA economic forum, Ndii said that Kenya’s fate was sealed when the country went to bed with the International Monetary Fund (IMF).
Further, he explained that Kenya was in receivership, meaning that it had to cut costs
“I make to make reference to something I said before, when you are in an IMF program, you are in a receivership. There is no relief. You will only get relief when you come out of receivership.
“When companies are in receivership, what they do is that they cut costs, they lay off people,” stated Ndii.
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Ndii Explains How the Govt is Trying to Fix the Economy
According to Ndii, the true economic relief will not come from external loans or temporary fixes, but from structural reforms, which he noted the government was striving to undertake.
Already grappling with rising costs of living, unemployment, and economic stagnation, Kenyans are bearing the brunt of IMF programs.
IMF typically imposes austerity measures like subsidy cuts, tax hikes, and public sector spending reductions.
Although the policies are aimed at addressing budget deficits and ensuring debt repayment, they often translate to immediate hardships for the average citizen.
“The reason why many countries are where they are and they are stuck in a microeconomic crisis, is that they take Panadol for their headache and they don’t deal with the source of the headache.
“An IMF program is a palliative. What you want to do is the structural things that we are doing. You can’t keep going back to the question, how much relief are we getting? At this point in time, zero,” explained the economist.
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Kenya Receives Another Loan from IMF
IMF in a statement on October 30 announced that its Executive Board has completed the review of Kenya’s economic programs and in turn approved a $606 million (Ksh78 billion) in combined disbursements.
According to IMF, the approval came after the Executive Board concluded its seventh and the eighth reviews under the Extended Fund Facility (EFF) and the arrangement under the Extended Credit Facility (ECF) approved in April 2021.
It also concluded its review under the Resilience and Sustainability Facility (RSF) arrangement, approved in July 2023.
“The Executive Board’s decision allows for the immediate disbursements of SDR365.28 million (about US$485.8 million) under the EFF/ECF arrangements and SDR90.47 million (about US$120.3 million) under the RSF arrangement,” part of the statement reads.
According to the International Monetary Fund, the financing will support efforts to strengthen public finances and enhance resilience to climate shocks, while protecting priority social spending.
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