NAIROBI, Kenya, Jan 29 — The government has expressed reluctance to drop stalled projects estimated to have already cost the taxpayer Sh390 billion in a new raft of conditions set by the International Monetary Fund (IMF).
National Assembly Speaker Justin Muturi expressed dissatisfaction on the proposal when he hosted the World Bank Country Representative for talks at his office in Parliament Buildings on Friday.
“Muturi expressed concern that the bank’s sister institution — the International Monetary Fund — has recommended that they be abandoned yet public funds have been sunk into them,” the Speaker office said in a dispatch following the meeting.
World Bank Country Director, Keith Hansen who made no direct reference to Muturi’s concerns however said the institution will seek to develop Kenya’s capacity support in favour of proper public investment.
“We’re here to help Kenya Institute reforms and change of paradigm to realize private sector driven growth,” he said.
Kenya has benefitted from IMF support with recent funding having been approved in December 2021 when the IMF Executive Board approved the immediate disbursement of Sh29.2 billion under the Extended Credit Facility, in a move meant to support Kenya’s program to address debt vulnerabilities and aid in the response to the COVID-19 pandemic.
The board agreed on the disbursement of the money on December 17 bringing the total amount disbursed to the country for budget support to Sh100 billion.
“The Executive Board completed the 2021 Article IV Consultation and the Second reviews of the 38-month Extended Arrangement under the Extended Fund Facility (EFF) and 38-month arrangement under Extended Credit Facility (ECF) for Kenya. The board has agreed to the immediate disbursement of USD258.1mn (Sh.29.2Bn) to Kenya,” IMF said in a statement published on December 18.
IMF had approved a USD2.34bn (Sh266bn) aid package for Kenya in April 2021 to be disbursed over 38 months, under the Extended Credit Facility and the Extended Fund facility.
IMF Deputy Managing Director and Acting Chairperson of the Executive Board, Antoinette Sayeh, said the approval was due to the robust economic growth that Kenya showcased in the financial year 2020/2021.
Sayeh said the board believed that the additional support would further aid in making advances to the country’s structural reform and anti-corruption agencies.
She further noted that the funding is expected to strengthen domestic revenue mobilization and expand the country’s ongoing COVID-19 vaccination drive.
“The Kenyan authorities remain firmly committed to their economic program in a challenging environment. Some additional fiscal space is needed in FY 21/22 for emergency spending to face the drought in the north and emerging security needs; the planned supplementary budget should also provide resources for expanding state-owned enterprises (SOEs) support, in line with program design,” Sayeh said.
She emphasized on the need for the Kenyan government to strengthen fiscal transparency in order to account for the utilization of the additional funds.
Sayeh noted that more effort should be put to address legal impediments in order to begin publishing beneficial ownership information for awarded public tenders in early 2022.
“Further strengthening fiscal transparency and governance requires more proactive efforts. The authorities should proceed with planned audits of COVID-19 spending, and promptly act to follow up on previous audits. Kenya’s medium-term prospects remain positive, and the authorities’ continued commitment to their economic program is essential to maintain macroeconomic balance, while ensuring a more sustainable, greener, and inclusive growth,” she stated.
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