IMF Holds Talks With William Ruto's Govt, Hints At Supporting Introduction Of New Taxes
- The International Monetary Fund team led by Haimanot Teferra was in Nairobi from September 11 to September 16
- It said it is committed to supporting the government in its efforts to identify a set of policies that could support the completion of the reviews under its programme
- The Bretton Woods institution advised the Kenya Kwanza Alliance administration to involve Kenyans in fiscal policy formulation
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TUKO.co.ke journalist Japhet Ruto has over eight years of experience in financial, business, and technology reporting and offers profound insights into Kenyan and global economic trends.
The International Monetary Fund (IMF) has concluded its talks with President William Ruto's government after an official five-day visit to Kenya.
Why the IMF supports new policies
The team, led by Haimanot Teferra, was in Nairobi between Wednesday, September 11, and Monday, September 16.
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In a statement on Tuesday, September 17, the IMF hinted at supporting the introduction of new taxes to enable the government to collect revenue to repay loans borrowed by the country from the Bretton Woods institution.
"We remain fully committed to supporting the authorities in their efforts to identify a set of policies that could support the completion of the reviews under the ongoing programme as soon as feasible. The authorities expressed commitment to advancing economic and governance reforms, which are crucial for fostering sustainable and inclusive growth that benefits all Kenyans. We will continue our discussions with the authorities," it explained.
Why the IMF asked govt to engage Kenyans
In July, the IMF advised the government to involve Kenyans in fiscal policy formulation.
This followed a wave of anti-government protests that led to the withdrawal of the Finance Bill 2024 and President William Ruto's dissolution of the Cabinet.
IMF spokesperson Julie Kozack said policymakers in low-income countries like Kenya face a complex balancing act between pressing needs in priority areas, managing rising debts and raising domestic revenue.
Kozack revealed that the IMF was working with Kenyan authorities on their proposed revenue policies to ensure the objectives could be met.
Why the IMF backed Finance Bill 2024
The IMF backed the Finance Bill 2024 despite massive protests against the introduction of new taxes.
It asked President William Ruto's government to remain committed to reforms under its programme as it warned of a shortfall in revenue collection.
The IMF was set to lend Kenya KSh 465 billion in its seventh review of the extended fund facility and extended credit facility arrangements.
Proofreading by Mercy Nyambura Guthua, journalist and copy editor at TUKO.co.ke
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