The International Monetary Fund (IMF) has reiterated that addressing governance issues is crucial for its ongoing support to Kenya. This statement follows the recent decision to postpone further funding after IMF staff conducted a fact-finding mission in Nairobi from September 11 to 16.
During meetings with Kenyan officials, IMF representatives requested governance diagnostics to ensure continued support for reforms under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) arrangements. This was confirmed during a media briefing on Thursday by Julie Kozack, the IMF Director of the Communications Department.
“Regarding governance diagnostics, we have previously encouraged the authorities to seek this assistance, and we continue to do so. While governance reforms may take time, promoting good governance is essential to the IMF’s engagement with the Kenyan authorities,” Kozack stated.
When asked about the specifics of governance diagnostics, she declined to provide detailed information but noted that such diagnostics are designed to identify areas for improvement in governance. “We will ensure you receive that list, along with further details on how these diagnostics are conducted,” she added.
At the end of the IMF mission, head Haimanot Teferra released a statement highlighting the productive discussions between the Kenyan authorities and IMF staff on policies and reforms aimed at addressing economic and fiscal challenges. “We remain fully committed to supporting the authorities in identifying policies to facilitate the completion of reviews under the ongoing program as soon as feasible.
The authorities expressed their commitment to advancing economic and governance reforms that are vital for sustainable and inclusive growth benefiting all Kenyans. We will continue our discussions with them.” In June, the IMF and Kenya reached a staff-level agreement on comprehensive policies and reforms necessary to complete the seventh review of the EFF and ECF arrangements, as well as the second review under the Resilience and Sustainability Facility (RSF).
Upon completion of the seventh review of Kenya’s economic program under the EFF and ECF arrangements, the total remaining access was set to adjust to 135.55 per cent of the quota, amounting to about Ksh 126 billion (US$976 million). This included a proposed recalibration of 21.67 per cent of the quota for access to approximately Ksh 20 billion (US$ 156 million) in zero-interest concessional resources under the ECF arrangement.
Overall, this brought the total IMF financial commitment during the EFF/ECF program to around Ksh 4.7 trillion (US$3.60 billion). Additionally, completing the second review under the Resilience and Sustainability Facility, approved on July 17 of the previous year, would unlock about Ksh 15.5 billion (US$120 million).
