IMF’s Recommendations for Kenya on Loan Acquisition and Economic Policies

The IMF has urged Kenya to balance loan acquisition with sound economic policies following a loan request. Haimanot Teferra stressed the need for enhanced governance and oversight of public debt levels while MP Aden Daud highlighted the risks of exceeding debt thresholds. The IMF insists on governance reforms to secure future financial assistance.

The International Monetary Fund (IMF) has urged the Kenyan government to ensure the balance between loan acquisition and robust economic policies. Haimanot Teferra, Chief of the IMF African Department, confirmed the receipt of a new loan request from Kenya during a recent meeting with lawmakers, highlighting the IMF’s ongoing support through its various programme facilities aimed at bolstering Kenya’s medium-term growth prospects.

Teferra pointed out that the design of specific debt thresholds and necessary amendments are vital to reinforcing governance and oversights of Kenya’s public debt. She also stated, “The IMF does not negotiate on behalf of member countries, but we have received a request for a new programme.”

The Parliamentary Caucus meeting, led by Wajir East MP Aden Daud, focused on Kenya’s public credit status, emphasizing that the country’s debt has surpassed the limits set by the Public Finance Management framework. Daud warned that without adequate oversight, this could inflate debt servicing costs and diminish fiscal space. He committed to fostering collaboration with parliamentary committees to enhance oversight of fiscal decisions.

The IMF delegation reiterated that balancing debt accumulation with sound economic policies remains crucial for Kenya to fulfill its financial duties and attract development partners. They underscored that governance and transparency reforms are imperative for sustained financial support through both existing and prospective IMF programmes.

In summary, the IMF has advised Kenya to strike a balance between acquiring loans and maintaining sound economic policies. Key discussions during a recent meeting emphasized the significance of enhancing governance, ensuring effective oversight of public debt, and reinforcing fiscal decisions. These steps are vital for protecting Kenya’s credit standing and improving collaboration with financial partners.

Original Source: eastleighvoice.co.ke