The International Monetary Fund (IMF) board will meet on July 18 to review Kenya’s request for an additional Sh28 billion ($244 million) in emergency loan, even as the country fell behind on key commitments including the establishment of a central payroll.
The IMF has revealed Kenya has requested certain waivers on the programme, indicating the country has failed to meet some of the conditions set in April last year when the fund approved a $2.34 billion (about Sh257 billion) loan to Kenya.
Kenya was expected to, among others, reform State enterprises, conduct a special audit on Covid-19 expenditure and enforce wealth declaration by public servants to access the loan in tranches.
“The decision to implement a common payroll system across MDAs [ministries, department and agencies] and counties was delivered with the articulation in late October of an agreed roadmap to implement the payroll system by June 2022,” IMF said in its update in December.
But weeks past the June deadline, the government is yet to fully implement the common payroll system.
IMF also demanded that the cash-strapped government make public the ownership details of all companies that are awarded public tenders as a way of curbing rampant theft of taxpayers’ funds.
Kenya has delivered on some of the IMF targets that saw authorities and the IMF reach a staff-level agreement on April 25 pending the board’s approval for the release of the funds.
“Third Reviews under the Extended Arrangement under the Extended Fund Facility and Under the Arrangement under the Extended Credit Facility, Requests for Modification of Quantitative Performance Criteria, and Waiver of Applicability for Performance Criteria under the Arrangement under the Extended Fund Facility,” IMF notes in its brief.
The multilateral lender is playing a pronounced role in shaping policy that would require the government to implement tough conditions across many sectors.
The IMF conditions came on the back of its multibillion-shilling loan facilities to Kenya where money flows straight into the budget to top up the public purse.
