The International Monetary Fund (IMF), on Friday, April 14, maintained that it did not push President William Ruto and his government to end fuel subsidies used to cushion Kenyans from high fuel prices.
During the regional economic outlook, IMF's Director for African Department, Abebe Aemro Selassie, explained that the decision to remove the subsidies was solely left to individual governments.
It was also noted that the financial institution only gave its view on the subsidies, which it perceived as regressive.
Selassie explained that in the regressive situations, the subsidies were not economically sensible given that they only benefited a small group of the population.
"Benefits of such subsidies tend to accrue to richer segments of society much more than poorer segments.
"In a world where we still have elevated levels of poverty, and elevated levels of development challenges, I’m not sure that this is the best use of resources," the IMF boss stated
Should Ruto want to continue with subsidies, IMF indicated that the same needed to be budgeted and the use of the money transparent.
"How governments do this, the extent of the fuel subsidies, of course, also varies with international market prices. So, that influences the timing of when governments remove, put, or sustain fuel subsidies.
"Again with Kenya, I think what we’re asking is that whatever subsidies the government wants to pursue, it’s put on the budget and made transparent," he stated.
The IMF boss was responding to reports that it had a deal with Ruto to end fuel subsidies after it got into office.
Ruto announced plans to drop fuel subsidies when he took office on September 13, 2022. According to the Head of State, the fuel subsidies had been misused in the past administration.
"On fuel subsidy alone, the taxpayers have spent a total of Ksh144 billion, a whopping Sh60 billion in the last four months.
If the subsidy continues to the end of the financial year, it will cost the taxpayer Ksh280 billion, equivalent to the entire national government development budget," he stated during his inauguration.
The move by Ruto saw the fuel cost hit the Ksh170 mark in his first month in office.
However, the opposition pressured the government to lower the cost of living, setting the demand as one of its irreducible minimums ahead of the bipartisan talks.
