The International Monetary Fund (IMF) disassociated itself with a statement ranking Kenya as the second worst country for investors in the world.
The IMF, on Saturday, July 16, stated that the World Uncertainty Index which was cited in an article by The Standard was developed independently by researchers, and is not an official IMF output.
On July 15, reports began circulating that the IMF’s World Uncertainty Index (WUI) stated that the economic and political uncertainty in the country has risen sharply by 84 percent to 0.628 points from 0.34 in the second quarter of 2021.
"Standard Media on July 15 posted an article under the title “IMF: Kenya is world’s second most uncertain for investors”. The IMF fully dissociates itself from the content of the article.
"Please be aware that the World Uncertainty Index that is cited in the article, developed independently by researchers, is not an official IMF output," IMF stated.
The report by the World Uncertainty Index indicated that Kenya was only better than Colombia in terms of political uncertainty and that is why investors were shying away from funnelling billions for economic development.
“A research that was done by WUI to measure economic and political uncertainty among 143 countries that represent 99 percent of the world’s Gross Domestic Product (GDP), showed that political uncertainty in Kenya is so high,” read the report.
According to the report, investors were also concerned about the election process, as evidenced by the 2017 General Election, in which the presidential results were overturned by the Supreme Court, necessitating new elections.
As a result, some investors resolved to hold back on spending until after the election.
“The index is constructed by text-mining the country reports from the Economist Intelligence Unit (EIU), a business intelligence company that provides country reports every quarter. These reports cover each country’s economy, policies, and politics,” the report read.
Kenyans are grappling with inflation and tough economic times and a report by Moody's, an international financial firm that provides investors with credit ratings, risk analysis, and research for stocks, bonds, and government entities, indicated that the East African country is among developing countries facing an economic crisis.
Kenya, Egypt, Tunisia, Ghana and other African countries are experiencing financial crises, as evidenced by traditional warning indicators.
Collapsing currencies caused by an almost depleted foreign exchange reserve were said to partly be part of the economic crisis, especially in Kenya.
