Why Uhuru's ex-IMF money men brought us here

Treasury Cabinet Secretary Henry Rotich delivers a speech during the signing ceremony of the the United Nations Development Assistance Framework (UNDAF) (2018-2022). [File, Standard]

President Uhuru Kenyatta’s top financial advisers have close links with the International Monetary Fund, which has been blamed for the recent rise in oil prices.

The IMF is said to be behind the push for a 16 per cent value added tax (VAT) on petroleum products that triggered the price increase. 

Observers have flagged the close relationship between the fund and Uhuru's top finance officials who have worked for the international lender in the past.

Treasury Cabinet Secretary Henry Rotich worked as an economist for IMF before joining the ministry.

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His second in command, Kamau Thugge, worked for the institution for 21 years before becoming Uhuru's senior economic adviser.

Before joining the World Bank, Geoffrey Mwau, the director general for budget, financial and economic affairs, worked for IMF.

Before his appointment, Central Bank Governor Patrick Njoroge was one of IMF's economic advisers.

The four are among the senior advisers to the President on matters relating to finance. Pundits say this could be a pointer to how the IMF bounced back to the core of decision-making in Kenya.

First task

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Drafting of the VAT Bill in 2013 was among the first tasks that the three ex-IMF officials at Treasury got down to after the victory of the Jubilee administration.

According to Mary Emaase, a former deputy chairperson of the budget committee in the National Assembly, several members resisted attempts to introduce the Bill.

“I remember it was bitterly fought even within the committee, but the majority had their way in approving the painful proposals,” said the former Teso South legislator. 

The IMF was behind the painful measures taken during former President Daniel arap Moi's tenure that saw massive layoffs in the civil service. President Mwai Kibaki gave the institution a wide berth.

The new tax has continued to draw sharp reactions from leaders.

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Rarieda MP Nicholas Gumbo said slapping VAT on petroleum products was illogical because there is no value addition to the commodity after it has been imported.

“Would you consider filling up the tank of your car as adding value?” he said.

But Senator Mutula Kilonzo Jr said Kenya has to demonstrate to the IMF that it has exhausted all possible revenue-raising options before it can borrow any more from the fund.

“Kenya had to show that it cannot borrow to repay other loans, hence these new taxes. We have already exhausted all other avenues,” Mr Kilonzo said.

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President Uhuru KenyattaFinancial AdvisersInternational Monetary FundCabinet Secretary Henry RotichKamau ThuggCentral Bank GovernorPatrick NjorogeVAT BillNational Assembly16 Percent Tax