IMF urges Kenya to balance loans acquisition with sound economic policies
Teferra reaffirmed the IMF's commitment to deploy the Extended Fund Facility, Extended Credit Facility and Rapid Credit Facility programmes to support Kenya's medium-term growth prospects.
The International Monetary Fund (IMF) African Department Chief Haimanot Teferra has confirmed the receipt of a new loan request by the Kenyan government.
Speaking at a meeting between the Parliamentary Caucus on the Parliamentary Network on the World Bank and the IMF Kenya Chapter, Teferra reaffirmed the IMF's commitment to deploy the Extended Fund Facility, Extended Credit Facility and Rapid Credit Facility programmes to support Kenya's medium-term growth prospects.
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"The IMF does not negotiate on behalf of member countries, but we have received a request for a new programme," Teferra stated.
She elaborated on the factors that need to be in place to enhance governance and oversight of Kenya's public debt. These include the design of debt thresholds, necessary amendments to reinforce credibility and confidence among development partners.
"Reviewing past programme targets is essential to understanding Kenya's commitments, the factors causing delays in implementation and the necessary adjustments to ensure future success," she noted.
Kenya's credit status
The meeting, held at Parliament Buildings and led by Wajir East MP Aden Daud, who is the caucus chairperson, brought together key legislators and IMF representatives to deliberate on Kenya's economic trajectory.
Central to the discussions was the country's credit status.
"Kenya's public debt has exceeded the threshold set under the Public Finance Management (PFM) framework. As such, further expenditure without adequate oversight and review could increase debt servicing costs while shrinking fiscal space," said Aden.
He emphasised the need for enhanced parliamentary scrutiny over economic policies and fiscal decisions, pledging to collaborate with relevant parliamentary committees to enhance legislative oversight and ensure that deviations from agreed programme objectives are properly addressed.
On their part, the IMF delegation reiterated the importance of balancing debt acquisition with sound economic policies, noting that Kenya's ability to meet its financial obligations would determine its attractiveness to development partners.
They highlighted governance and transparency reforms as key conditions for continued financial assistance under existing and future programmes.
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