Central Organization of Trade Unions (COTU-K) Secretary General Francis Atwoli has issued a stark warning to the newly appointed Treasury Cabinet Secretary, John Mbadi, urging him to tread carefully in dealings with the International Monetary Fund (IMF).
Atwoli cautioned that blindly following IMF advice could lead Kenya down a perilous path, exacerbating the financial strain on ordinary citizens.
This warning followed a meeting on Wednesday, August 14, between Mbadi and the IMF Representative in Kenya, Selim Cakir. The meeting, confirmed by the Ministry of Finance and National Treasury on X (formerly Twitter), took place ahead of the anticipated disbursement of over Ksh181 billion from the IMF.
According to Atwoli, this financial injection comes with strings attached and the potential implications of these conditions could be devastating for the country’s economy.
Atwoli pointed to the historical precedents, noting, “Following the IMF's advice without scrutiny has led to adverse effects on the citizenry and workers.” He drew parallels to the regime of former President Mwai Kibaki who approached IMF recommendations with caution, balancing them against the welfare of Kenyan citizens.
Atwoli asserted that such a balanced approach is necessary to prevent economic policies from becoming a burden on the population.
The veteran trade unionist further warned that IMF conditionalities often involve harsh austerity measures, including increased taxation, which could trigger widespread social unrest.
“IMF conditionalities often involve measures that place undue financial strain on the citizenry, primarily through increased taxation and so-called austerity measures,” Atwoli stated.
He cautioned that these actions not only lead to social unrest but also ignite demonstrations as citizens grapple with the negative impacts on their livelihoods.
In a strong message to Mbadi, Atwoli advised that the new Treasury CS should approach IMF conditionalities with caution and a deep understanding of their potential impact on ordinary Kenyans.
He emphasised, “The far we stay away from the IMF and its accomplices, the better for this country.”
Despite his vocal warnings about the IMF, Atwoli has remained silent on Mbadi’s broader economic reforms, particularly the CS’s plans to clean up the government’s bloated payroll and carry out tax reforms.
These reforms are part of a broader effort to cut spending and bolster the government’s finances—a critical issue for a country that has been rocked by deadly protests over the last two months.
Kenya faces gaping budget deficits and is under pressure to boost revenue collection to meet conditions set by the IMF for a lending programme. Mbadi has been clear in his intentions, stating that anyone obstructing reform efforts should “give way.”
This includes a long-delayed project to link government payrolls with technology systems, aimed at eliminating ghost workers and pensioners.
Mbadi also announced plans to speed up reforms at the Kenya Revenue Authority (KRA), which collects taxes. He highlighted the potential for a significant increase in revenue collection, noting that raising the revenue-to-GDP ratio by just 3 per cent could generate an additional Ksh400 billion.
Continuing his predecessor’s tax amnesty programme, Mbadi said the initiative, which exempts those who pay overdue taxes from penalties, has already netted Ksh43 billion.
This strategy, he believes, is essential for stabilising the nation’s finances and meeting the IMF’s stringent requirements.
