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Kenya is keen to secure a new stand-by credit agreement with the IMF after the previous one expired in 2018.

Kenya’s parliament issued a rare and stinging rebuke to the finance ministry in a report seen by Reuters on Friday, saying a pattern of unrealistic revenue projection is fuelling growing debt.

The criticism from the parliamentary budget committee comes less than two months after the International Monetary Fund said mismanaged public infrastructure projects worth a total of $10 billion have stalled.

“They need to do more realistic revenue estimates,” committee chair Kimani Ichung’wah told Reuters, saying the finance ministry sought to revise last year’s budget just weeks after it was approved by parliament.

The Treasury should review its targets before presenting this year’s budget in June, he said.

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Finance Minister Ukur Yatani, who was appointed in January after acting in the role for six months, said the government had missed its annual revenue collection targets by a cumulative 1 trillion shillings ($9.75 billion) over the past seven years.

Revenue expectations have now been lowered, he said, and expenditure of hundreds of billions of shillings had been cut.

“The framework we are presenting is the best, it is the most realistic, under the current circumstances,” Yatani told Reuters. “Our number one primary concern is on fiscal consolidation.”

The finance ministry wants a budget deficit of 4.9% of GDP in the next fiscal year, down from 6.3% this year. Kenya’s financial years run from June-July.

Yatani said the government’s borrowing is set to drop to 570 billion shillings in the next financial year, from 770 billion shillings this year.

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“We are trying to correct a situation that has been happening over the last few years,” the minister said.

The IMF said on Tuesday at the end of a two-week mission to Kenya that it was in broad agreement with the government on the main aspects of its fiscal deficit reduction plan.

Kenya is keen to secure a new stand-by credit agreement with the IMF after the previous one expired in 2018.

IMF Ukur Yattani Budget

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