- Lawmakers will also seek a brief on how the country’s revenue is performing and on the general debt obligations and whether the country has defaulted on any repayments.
- The loan triggered a storm in the country with Kenyans accusing the government of over borrowing with little to show for the huge debt burden.
Image: FREDERICK OMONDI
National Treasury CS Ukur Yatani will face MPs on Wednesday to shed light on the Sh255 billion loan facility by the International Monetary Fund.
The CS will face a joint sitting of the committees of Budget and Appropriations and that of Finance and National Planning to answer questions raised by the loan.
The loan triggered a storm in the country with Kenyans accusing the government of too much borrowing with little to show for the huge debt burden.
Budget committee chairman Kanini Kega said the meeting of the joint committees is an opportunity for the Treasury to expound on the loan in regards to the concerns raised by Kenyans.
MPs want the Treasury to give more details on the IMF loan and the preconditions set by the lender.
The lawmakers also want a brief of what the money will do, whether it will be for budget support, Covid-19 interventions, to retire other expensive loans or for general fiscal consolidation.
“We want to give them an opportunity to tell Kenyans how we are doing in terms of macroeconomics – that is to say our overall financial situation in the face of the pandemic,” Kega said.
Lawmakers will also seek a brief on how the country’s revenue is performing and on the general debt obligations and whether the country has defaulted on any repayments.
Kega said the meeting will further explore what it means to get credit from the Bretton Woods institutions.
“The question we seek answered is whether lending from such institutions is a sign of confidence in our fiscal systems,” the Kieni MP said.
The meeting follows in the wake of hue and cry by Kenyans that further loaning to the country would worsen the already harsh economic times.
Taxpayers stormed the IMF social media spaces in a call for a stop of the disbursement of the Sh255 billion approved in negotiations between the IMF staffers and the Treasury.
IMF said the Extended Credit Facility and Extended Fund Facility will enable Kenya to continue responding to the Covid-19 pandemic and address its debt vulnerabilities.
It said in a statement that the initial disbursement of Sh34 billion was for budget support, adding to the Sh79 billion in emergency Covid-19 aid that was disbursed in May 2020.
The IMF said the country’s debt remained sustainable but was at high risk of debt distress.
It advised that the government undertakes urgent structural policy challenges to address the emerging concerns, especially in regards to performance of state-owned enterprises.
IMF said it extended the facility since the Kenyan authorities have demonstrated strong commitment to fiscal reforms during the pandemic, and that the country’s medium-term prospects remain positive.
The lender said Kenya should continue to provide necessary support to the economy and address the financial weaknesses in the said state-owned enterprises.
Among the conditions precedent to the disbursement was that public servants declare their wealth.
It also asked the government to make public the ownership details of all companies that get public tenders as a measure to curb corruption.
State agencies are also required to publish procurement information including details of individuals whose companies are awarded contracts.
It also sought the operationalisation of the Access to Information Act and a review of asset declaration laws and conflict of interest rules.
The lender also sought that anti-money laundering laws be implemented fully as measures to tame pilferage of public resources.
Treasury earlier said the monies would help mitigate ‘the devastating effects of Covid-19 and set the stage for economic recovery.
Yatani said concessional loans would be the best way to go about meeting budget deficits to keep the country afloat.
-Edited by SKanyara