Global aid agency, Oxfam, warned President William Ruto's administration that the measures being implemented as part of loan conditions by the International Monetary Fund (IMF) would worsen the economic situation in the country.
In a report titled IMF Social Spending Floors: A fig leaf for Austerity, Oxfam questioned the effectiveness of the policies stipulated by IMF across 17 low and middle-income countries.
As part of the conditions, Ruto's Government committed to limiting growth in the public sector wage bill inclusive of salaries. This, according to Oxfam, would lead to job losses.
"Indicatively, spending on wages and salaries was expected to drop from 4.3 per cent of the Gross Domestic Product (GDP) in 2020/21 to 3.7 per cent by 2022/23. 70 Such cuts occurred amid intense pressure on the health system in the aftermath of the pandemic and on public education due to comprehensive reforms," the statement read in part.
Owing to these parameters, the country's 2022/23 budget revealed huge declines in the financing of different ministries including the Ministry of Health, State Department for Early Learning and Basic Education, State Department for Social Protection, Senior Citizens Affairs and Special Programmes and State Department for Gender.
Other policies to be enforced included the scrapping of subsidies for maize and fuel, budget cuts and tax increase in a bid to raise revenue and lower public expenditure.
Under the IMF conditions, the government was required to restructure state-owned enterprises, which comprised the higher education sector. This detailed that universities risked harmful cuts despite the number of students expected to increase in the coming years.
To plug this fiscal gap, the government considered various measures such as increasing tuition fees or only providing financial support to students from underprivileged backgrounds.
Thus, in its attempt to meet IMF-mandated fiscal consolidation measures, the Kenyan Government would institute cuts to public higher education.
The news came as Central Bank of Kenya (CBK) Governor Patrick Njoroge affirmed that the government is in talks to acquire Ksh162 billion from IMF and World Bank for budgetary support.
“We are not very worried because we have significant inflows coming in,” Njoroge stated during a recent interview on Reuters.
As of January 2023, Kenya's public debt stands at Ksh9.1 trillion.
