The International Monetary Fund (IMF) is back with its assessment of the country’s economic situation.
A team from the global financial institution was in the country for the last two weeks on a fact-finding mission and in its report a couple of days ago, ticked a few boxes and pointed out other areas that need more attention from the government.
This was follow-up to a visit by another team in February which, it will be remembered, got the government to commit itself on reducing debt and fiscal deficit and to tighten expenditure, among other measures.
The latest report shows the government has achieved some success in these areas, with fiscal deficit – difference between revenue and expenditure - down to seven per cent by June 30 from about nine per cent last year, and a freeze on new projects that were expected to take a large chunk of public funds. But while this bodes well for the country, these achievements have come at a cost that is already being felt by mwananchi, with new and higher taxes imposed on basic items such as unga and kerosene to raise more revenue for the government.
The push by the IMF to have the cap on interest rates removed should prepare Kenyans for tougher financial times ahead. Toeing the IMF line means that Kenya will have favourable access to the global lender’s financial assistance, such as the Standby Credit Facility that Treasury can draw from to support the shilling.
But deep involvement of the IMF in our economic policy also brings back memories of the austerity programme in 1980s and early 90s that put the country through a very difficult period. We urge President Uhuru Kenyatta to handle the global lender with some restraint.