The IMF has urged Kenya to balance loan acquisition with strong economic policies following a new loan request from the government. Key factors discussed include public debt governance and the need for enhanced parliamentary oversight. The IMF emphasized that sound policies are crucial for maintaining financial support from development partners.
The International Monetary Fund (IMF) has urged Kenya to balance its acquisition of loans with effective economic policies to enhance its credit status. Haimanot Teferra, Chief of the African Department at the IMF, confirmed receiving a new loan request from the Kenyan government during a meeting with the Parliamentary Caucus on the World Bank and IMF Kenya Chapter.
Teferra elaborated on the IMF’s commitment to utilize various financial support programs, including the Extended Fund Facility, to bolster Kenya’s medium-term growth potential. She emphasized the importance of establishing governance structures and public debt oversight to reinforce credibility among development partners.
During the meeting, various legislators, including Wajir East MP Aden Daud, examined Kenya’s economic trajectory, focusing on the country’s debt levels. Aden noted that Kenya’s public debt has surpassed the limits established by the Public Finance Management (PFM) framework, warning that inadequate oversight could escalate debt servicing costs, negatively impacting fiscal space.
The IMF delegation reiterated the need for sound economic policies when acquiring new debts, emphasizing that Kenya’s ability to fulfill financial commitments is crucial for maintaining support from development partners. The importance of governance and transparency reforms was highlighted as essential for future financial assistance under ongoing agreements.
In summary, the IMF’s call for Kenya to balance loan acquisition with sound economic policies underscores the critical need for sustainable fiscal management. The meeting highlighted the concerning status of Kenya’s public debt and the imperative for enhanced legislative oversight and governance reforms to ensure continued support from international financial institutions. Moving forward, Kenya’s commitment to sound economic policies will be vital in attracting development partners and securing future loans.
Original Source: eastleighvoice.co.ke