Kenya’s Treasury CS Nominee Defends IMF Amidst Public Outrage
Treasury Cabinet Secretary nominee John Mbadi has come out to defend the International Monetary Fund (IMF) for Kenya’s debt and tax problems, which have sparked nationwide protests over the last two months.
Mbadi, who spoke during his vetting by Parliament’s Committee on Appointments on Saturday, stated that the IMF is invited into a country rather than forced to enter.
Mbadi stated that Kenya had previously operated independently and funded its own activities.
However, the country was forced to return to the IMF for assistance following the Covid-19 pandemic, among other factors that hampered the country’s ability to continue operating independently.
John Mbadi: Our public debt levels are worrying. Debt accountability is a priority. Kenyans should know that it’s not the gov’t that owes the China gov’t, World Bank or IMF, it's them. #K24Siasa pic.twitter.com/Z2t9LBgf9t
— K24 TV (@K24Tv) August 3, 2024
He stated that Kenya’s agreement with the IMF calls for increased revenue streams, but that the rate can be adjusted so that taxpayers are not overburdened.
“I want to be very clear on IMF…IMF will never invite themselves to a country, we do invite them and agree with them on a programme,” he said.
“There was a period we were not under IMF, but because of challenges, occasioned largely by Covid-19, and the drought in the region, and the global disturbance of the supply chain, we then went back to IMF in 2020/2021.”
“But I have looked at what are these conditionalities. You know sometimes we may blame IMF for nothing. We have agreed with them on a programme that for us to tap into that loan, what we must do in fact is one key thing; revenue mobilization,” Mbadi continued.
“So we just need to agree on how we can convince IMF for the period that we’re going to be under their programme, which I don’t think should be long.”
Mbadi also stated that Kenya should begin to wean itself from the IMF’s shackles and return to the days when it was self-sufficient in financing.
He stated that the country’s tax-to-GDP ratio should be reduced to 18%, which would add more than Ksh.600 billion to the National Treasury.
“We must move to a system where we divorce ourselves from IMF, and depend on ourselves as we were doing before, but that we can only do by doing what can be done in the interest of the country,” stated the former Nominated MP.
“They want us to maintain a deficit of no more than 4.4%, that’s what we have agreed on currently, but we’re moving towards a budget deficit in the region of 2.5-3%. I know the government has talked about 3.1%, we can sustain a financing gap of 3%. With that, you will not need IMF intervention.”
He added: “If we take back our tax revenue to GDP to 18%, we will be adding to our exchequer not less than Ksh.600 billion, and I think it is achievable.”
Kenya’s Treasury CS Nominee Defends IMF Amidst Public Outrage
