Reduce extravagant spending instead of borrowing from IMF

President William Ruto and International Monetary Fund Deputy Managing Director Nigel Andrew Lincoln at State House, Nairobi, on December 9, 2024. [File, Standard]

The announcement by the International Monetary Fund (IMF) last week of its intention to give Kenya a new loan is both predictable and worrying. Of particular concern is why the government would approach the IMF with this request when, already, majority of the country's revenue is spent on loan repayment. The government is spending billions of shillings every year on loan repayment and seeks to fix the problem by borrowing more money.

One would have hoped that the government would be working hard to ensure that last year's protests, that began when the government sought to increase taxes as directed by the IMF, are not repeated. It is doubtful that the IMF would not recommend once again that taxes be increased in order for Kenya to be able to keep up with repayments. Indeed, last year when the IMF recommended a tax increase, it also highlighted that the increase would likely result in protests.