Kenya may be required to submit a new revenue plan to the International Monetary Fund following the withdrawal of the Finance Bill, 2024.
An analysis conducted by Al Jazeera on Sunday showed that the government, acting under stringent revenue-raising measures put forward by the IMF will have to elaborate its next course of action to meet its targets.
According to IMF’s regulations, the organisation reviews a nation’s proposed economic reforms before releasing any funding whereby in Kenya’s case, the reforms are presented every six months.
However, with imposition of more taxes now not an option, the government is expected to come up with an alternative plan to submit to the multi-lateral lender.
“Kenya will now likely have to submit a new revenue plan to the IMF, analysts said.
Al Jazeera additionally reported that part of the austerity measures that Ruto announced would be significant in creating the plan to be submitted to the IMF.
According to the expert analysis, the austerity measures recently announced by President Ruto were a step in the right direction for Kenya.
Under the new measures, the government is projected to generate needed funds by cutting Ksh177 billion shillings ($1.39bn) from the budget for the fiscal year that began this month and borrow about Ksh169 billion shillings ($1.31bn).
Additionally, the experts supported the government’s moves stating that they should have been the initial go to for the government instead of forcing taxes down Kenyans' throats.
They’re now basically doing everything they were supposed to do before,” Dumebi Oluwole, a senior economist with Stears Inc stated in the analysis.
“When the IMF gives you conditions, you don’t need to pass on the bulk to the people when you know the situation in your country,” she added.
This new revelation comes after President Ruto had a phone call with the International Monetary Fund (IMF) Managing Director Kristalina Georgieva earlier on in the week.
Though the details of the call were not disclosed, diplomatic sources told Reuters that there was a push for the IMF to exercise flexibility on Kenya’s borrowing terms.
