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When President Moi unwillingly accepted IMF economic restructuring in early 1990s, Kenya was virtually bankrupt, with limited options for funding its budgets.
The cold war had just faded and with it the Western funding that had sustained corrupt regimes in Africa. IMF loans and grants to Kenya became conditional on economic reforms which significantly liberalised the economy, and inadvertently reversed gains in production value chains (industries, agriculture, mining, forestry) which have remained crippled to this date.
Further, IMF efforts failed to stop financial leakages by corrupt political and government elites.
Thirty years later, IMF is to undertake a similar review of financial governance systems addressing similar funding challenges. We have a new Treasury Cabinet Secretary, and it is proper that he is given every chance to work with IMF to streamline Kenya’s financial governance which includes upgrade of procurement systems.
And the following is my wish-list of governance areas that IMF should give opinions.
Top of my list is long-term economic planning which appear to have stopped. This critical function by Ministry of Economic Planning appears to have been hijacked by economic advisers domiciled elsewhere.
Long term plans allow for alignment of national development visions, budgeting, funding and execution, while providing for affordable debt. These days, unplanned and unbudgeted surprise projects are forcing Kenya into unscheduled debts. By now, Kenya should be working on Vision 2050 to address ongoing generational and technological shifts.
IMF should also review how government-to-government deals are originated, negotiated and awarded, and especially how they are awarded to private firms on single-sourcing basis.
This may be the area presenting the largest exposure to Kenya’s procurement integrity and even long-term debts. IMF may equally wish to give their inputs into the application of PPP laws on such deals, and especially if these end-up single sourced. This area cannot be sufficiently addressed by the procurement systems that the CS is contemplating.
Most of the high-level corruption in Kenya is perpetrated by political office seekers, who need to accumulate cash to fund elections.
IMF may need to comment on best practices for funding political electoral processes during national elections, without politicians dipping their hands into public coffers. This is the principal contributor of corruption in Kenya.
IMF may further need to comment on Kenya’s legal and constitutional adequacy to address corruption, especially in areas of corruption prosecution where corruption cases continue to be withdrawn.
Finally, I expect IMF to consult with a wider cross-section of Kenyans to get a balanced view on how to enhance financial governance systems and reduce financial resource leakages.
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