IMF Warns it Will Stop Giving Loans to Kenya

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    President Uhuru Kenyatta (left) and Kristalina Ivanova Georgieva-Kinova (right), the Managing Director of the International Monetary Fund
    File
  • The International Monetary Fund (IMF) has threatened to stop funding to Kenya should the country breach the set inflation targets.

    One of the conditions stipulated by IMF for the programme agreed in February 2021, is that Kenya should maintain a target of five percent plus or minus 2.5 percent in order to ensure the price stability of the country.

    However, data from the Kenya National Bureau of Statistics (KNBS) shows that the inflation rate rose from 4.1 percent in September 2020 to 6.5 percent in June 2021.

    Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF).
    Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF).
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    The IMF has warned that Kenya should lower the targets if it seeks to continue receiving funds from the international body.

    It added that if the country exceeds the targets, funding will be stopped until a consultative meeting between the IMF executive board and the Kenyan government takes place. 

    "When the consultation with the IMF Executive Boards is triggered, access to fund resources will be interrupted until the consultation takes place," IMF stated.

    The international body set a series of test dates at the end of March, June December and June 2022 in order to measure the rise or drop of inflation rates. 

    The policy of inflation rates is among the conditions stipulated by IMF during its agreement with Kenya.

    Among the conditions include the government enforcing wealth declarations for all public servants in order to curb corruption, reforms to be implemented in selected parastatals to return them to profit-making organisations.

    "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.

    "We will continue to support efforts of the Financial Reporting Centre (FRC) towards encouraging and strengthening the use of financial intelligence to trace proceeds of corruption by sharing relevant financial intelligence with law enforcement agencies," the government pledged in response to the conditions set out by IMF.

    President Uhuru Kenyatta speaking on Thursday, April 8, at State House, Nairobi when he delivered the opening statement during a virtual town hall meeting of the OACPS.
    President Uhuru Kenyatta speaking on Thursday, April 8, at State House, Nairobi when he delivered the opening statement during a virtual town hall meeting of the OACPS.
    PSCU