Following a six-day visit to Kenya, an International Monetary Fund (IMF) staff team has provided an update on the development of policies to address the country’s financial challenges. This comes in the wake of the Finance Bill 2024 being rejected and anti-tax protests led by GenZ.
The IMF reported that discussions with the Kenyan government focused on policies and reforms needed to tackle the evolving economic and fiscal issues. Team leader Haimanot Teferra stated, “The Kenyan authorities and IMF staff had productive discussions on policies and reforms to address these challenges.”
In 2021, Kenya secured a four-year loan agreement with the IMF and sought additional borrowing in May 2023 to support climate change efforts, bringing its total access to IMF loans to $3.6 billion. In June 2024, the country also reached a staff-level agreement with the IMF for the seventh review of its program.
However, the recent protests and the withdrawal of the Finance Bill 2024 have delayed the IMF executive board’s approval and the subsequent release of funds. Teferra noted that the IMF is working closely with Kenya to identify policies that could facilitate the completion of the reviews under the ongoing program.
“We remain fully committed to supporting the authorities in identifying policies that could help complete the reviews as soon as possible,” Teferra emphasized. He added that the Kenyan government has shown commitment to advancing economic and governance reforms vital for sustainable and inclusive growth.
In July, Kenya submitted an economic repair plan to the IMF after the Finance Bill 2024’s rejection. Prime Cabinet Secretary and Acting Treasury CS Musalia Mudavadi mentioned before the parliamentary budget committee that the IMF board was expected to review the plan at its recent meeting.
Mudavadi also assured the committee that the National Treasury has continued to engage robustly with the IMF despite the protests. “Our goal is for Kenya’s proposal to receive favorable consideration so we can move past our current challenges,” he said.
