The International Monetary Fund (IMF) has started a virtual review mission to Kenya after awarding the government a Ksh255 billion credit facility in April 2021.
Its mission agenda is to assess the progress of specific policy objectives in line with its proposed timelines to Kenya.
The virtual review will also ascertain whether the government is adhering to conditions aligned with the loan or risk consequences such as termination and being banned.
IMF had issued the government with stringent conditions before advancing the loan which would be given out in instalments in a three-year period.
These included streamlining parastatals to generate profit rather than losses and to cut government expenditure. This was witnessed when President Uhuru Kenyatta appointed a task force to review power purchase agreements between Kenya Power and private electricity generators.
Uhuru's move was geared towards taming Kenya Power's high electricity cost. The company also announced that it would restructure its expenditures and recover arrears owed so as to clear its debts.
Treasury further announced plans to restructure Kenya Airways loans amid renationalisation plans through the National Aviation Management Bill sent for debate in Parliament.
Financial evaluation for Kenya Airports Authority (KAA), Kenya Railways Corporation (KR),, Kenya Electricity Generating Company (KenGen), Kenya Ports Authority (KPA) and the three largest public universities. Moi, Kenyatta and Nairobi will also be undertaken.
Other conditions given to Kenya in the IMF loan were fighting corruption through compulsory wealth declarations for all public servants and ensuring companies submit accurate, complete and updated beneficial ownership information to the registrar of companies.
"We have noted the vulnerability of the financial sector to the risks posed by the laundering of the proceeds of corruption, and we will, therefore, continue to use AML/CFT measures to support anti-corruption efforts," IMF reiterated its stance.
A section of Kenyans had opposed the Ksh255 billion facility and had urged IMF to desist from advancing loans to Kenya as the funds were allegedly embezzled by unscrupulous individuals. The protests were based on Uhuru's remarks that the government loses over Ksh2 billion daily through graft.
However, repaying the loan will prove to be a huge toll and the government announced plans to expand its tax base through the implementation of post-clearance audits, comprehensive audit of all exemptions, enhanced scanning and intelligence-led verification of cargo at the ports.
The Kenya Revenue Authority (KRA) also announced plans to introduce a wealth tax where the rich will be heavily taxed to raise funds.
