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| Aerial view of Express way |
The International Monetary Fund (IMF) appears to be softening its position on Kenya, with the fund now saying it will asses afresh Kenya’s macro and micro environment.
On Thursday the fund said it will embark on assessing the current developments in Kenya, where it will include the assessment report in its ongoing program reviews with the Kenyan authorities.
IMF is currently implementing a financial package with Kenya, where it plans to lend to the country a total of $131 billion by the year 2025.
In a statement, the IMF spokesperson Julie Kozack says the adjustments will be based on the evolving situation in Kenya including the recent demonstrations that led to the withdrawal of the Finance Bill 2024 and the dissolution of the cabinet.
The Fund is also urging the Kenyan government to mobilize more revenues to meet the country’s needs to address the declining tax-to-GDP ratio.
According to IMF, Kenya’s tax to GDP ratio has been declining for almost a decade since its peak of 15.4pc in the 2014, 2015 financial year.
Over the same period, the public debt service to revenue ratio, an indicator of Kenya’s capacity to repay its debt obligations has increased markedly from about 35 to about 60 percent of revenues.
IMF reports that this trend reduced the resources available for development spending including on education, health, and priority social programs.
However, a statement shared by IMF Spokesperson Julie Kozack assured of supporting Kenya’s efforts to achieve inclusive and sustainable growth.
IMF was set to disburse 131 billion shillings in new financing for Kenya at the end of its 7th multi year program. In the statement, IMF recommended the Government to enhance transparency, accountability, and anti-corruption efforts.
By Frederick Muoki –