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Mudavadi wants conditions of Sh262b IMF loan revealed

BUSINESS
By Moses Nyamori | April 6th 2021

 

ANC party leader Musalia Mudavadi during an interview on April 4, 2021. [Edward Kiplimo,Standard]

Amani National Congress (ANC) leader Musalia Mudavadi wants National Treasury to disclose conditions set out by the International Monetary Fund (IMF) in approving the Sh262 billion loan.

Speaking to The Standard, the former Finance Minister said Kenyans need to know if there would be more taxes or reforms in the civil services that could result into mass firing of public servants.

He also called for transparency in managing the country’s swelling debt. Mudavadi also called on the Government to learn how to borrow without hurting the taxpayers.

“IMF has its conditions; if you are drawing from that facility then there must be some conditions. What the Treasury needs to tell Kenyans is the conditionality tied to the facility by IMF. Is it going to be civil service reforms? Does it mean people will be retired early to contain the hemorrhage?” said Mudavadi.

“…If it will be higher taxes, which are these areas they will propose higher taxes or reforms on? They should not hide the conditions.”

He said the country needs to change tack and go for concessional loans instead of commercial loans that attract huge interest rates under a short repaying period.

He said that the debt burden has been occasioned by the borrowing spree to finance capital projects such as the Standard Gauge Railway and other mega infrastructure projects.

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“What is affecting us is the commercial borrowing to finance capital projects. Always make sure such capital projects are funded by concessional loans that attracts less interest and has long servicing periods,” said Mudavadi.

“Countries borrow, but what is important is the ability to pay without hurting the citizen. We also need more transparency in the management of our debt,” he added.

The concerns by the former deputy premier comes barely two days after IMF expressed concerns that heightened political activities as the country prepares for a possible referendum and General Election might scuttle Kenya’s belt-tightening plans.

Flagging the buildup of political activities as one of the risks to the Sh262 billion programme that its Executive Board approved on Friday, the IMF emphasised that it is only by adhering to the agreed austerity path of increasing revenues and cutting non-essential spending that Kenya would overcome the spending temptations that accompany the electioneering period.

Kenya is set to receive Sh79 billion as part of the Sh262 billion before the end of this Financial Year, while the rest will be released every six months after the review of the country’s performance.

The IMF noted that the programme provides a strong signal of support and confidence, but was not without its risks including uncertainty about the path of the pandemic and the upcoming political calendar. 

At the same time, Mudavadi rallied Kenyans to go for the Covid-19 jab to support measures being put to contain the disease that has disrupted the economy.

He dismissed as fallacies claims that the vaccine could cause infertility and other side effects.

“The rate of infections is higher compared to the first wave. The vaccination process should be facilitated. It should not be riddled with controversy. That is why some of us public figures have done it so we can encourage people to come out and take it,” said Mudavadi.

He added: “There are myths that if you take the vaccine, it is going to affect your procreation activity or capability. And we know all these are false. We all took polio vaccination at one point or the other, we took the yellow fever, we took measles. All these have been there and the global population has continued to grow. It is a fallacy for people to undermine such a noble idea."

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