- In the end-of-mission press statement, the international lender said this is a step in the country's effort to combat rampant corruption.
- IMF also praised the government's plan to scrutinize Covid-19 expenditures amid corruption allegations.
The International Monetary Fund (IMF) has lauded Kenya's plan to list beneficial ownership information for successful bidders in government tenders.
In the end-of-mission press statement, the international lender said this is a step in the country's effort to combat rampant corruption.
“Kenya is moving forward on its governance and anti-corruption agenda. Revised documents for government tenders, introduced this month will enable the publication of beneficial owners for successful bidders, which will be a requirement going forward,'' the statement read in part.
The team also praised the government's plan to scrutinize Covid-19 expenditures amid corruption allegations.
The government is conducting special audits of Covid-19 vaccination spending up to end-June 2021 and plans to include a chapter on Covid-19-related spending in the Auditor General’s comprehensive audit of FY20/21 expenditure.
''This will provide important transparency in the coming months on the government’s pandemic response,'' the IMF team said.
Kenya has largely stagnated in the fight against corruption, moving a step lower in the latest corruption index by Transparency International.
According to the 2021 Corruption Perceptions Index (CPI), Kenya scored 30 out of 100, a slight drop from 31 in 2020.
“Kenya’s score still falls below the Sub-Saharan average of 33 (a rise of one point from 32 in 2020) and the global average of 43 – a score below 50 indicates serious levels of public sector corruption.
IMF said Kenya is on track to meet its fiscal objectives and put debt as a share of GDP firmly on a downward path.
The country is planning to review its debt ceiling from an absolute figure of Sh9.1 trillion put in place in 2019. Early this month, Cabinet Secretary Ukur Yatani said the government is considering capping borrowing at 55 per cent of GDP.
The country's debt currently sits at Sh8.2 trillion or 69.8 per cent of GDP.
The staff reached an agreement to advance the Sh28 billion loan to Kenya as part of the $2.3 billion Special Drawing Right (SDR) approved in April last year.
The agreement is subject to the approval of IMF management and the executive board in the coming weeks.
Upon completion of the review, Kenya would have access to $244 million (Sh28.27 trillion) bringing the total IMF financial support under these arrangements to about $1.17 billion (Sh134.5 billion).
“Kenya is on track to meet its fiscal objectives and put debt as a share of GDP firmly on a downward path,” an IMF report read.
The report further states that Kenya’s fiscal position has been underpinned by strong tax revenue performance this year, buoyed by a robust economic recovery.
The amount is aimed at cushioning the country from adverse economic implications brought about by Covid-19 and the Russia, Ukraine war which has resulted in the global sharp increase in energy and fertilizer prices for households and businesses.
The lender further lauded Kenya for making progress on restructuring state-owned enterprises including Kenya Airways (KQ) and the Kenya Power and Lighting Company (KPLC) whose ongoing restructuring was deemed important to minimize costs to the exchequer.
KQ will receive a Sh36.6 billion bailout in the financial year starting July as part of efforts to minimize cash-flow constraints following global lockdowns triggered by the Covid-19 pandemic.
The airline was directed to trim its network and rationalize its flight frequencies.
“At KPLC, crystallizing an action plan to restore KPLC’s medium-term profitability and fully cover any financing gaps through end-2023 will likewise be critical to minimize calls on the budget,” the report mentioned.
The authorities’ plans to implement their blueprint for governance reforms at the state corporations will provide a welcome framework to strengthen the governance of SOEs.