News and Analysis
November 21, 2024
The US ambassador to Kenya, Meg Whitman has revealed that President William Ruto's withdrawal of the Finance Bill 2024 led to the International Monetary Fund (IMF) cancelling Kenya's Ksh131 billion loan.
According to Whitman, the loan approval that was to happen on June 12th through the IMF could not go through due to the withdrawal of the controversial Finance Bill 2024 by President Ruto following mass demonstrations by Kenyans against the bill.
She added that the withdrawal amounted to the Kenyan government violating the terms of the Fund's agreement.
"The IMF was going to approve a disbursement around June 12 but when the Finance Bill got pulled down, they could no longer do it," Whitman noted.
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According to IMFs terms of agreement, countries that borrow from IMF should adjust their economic policies that led it to seek financial assistance. The Finance Bill 2024 was to enable Kenya to get more money to repay the loan.
“When a country borrows from the IMF, the government agrees to adjust its economic policies to overcome the problems that led it to seek financial assistance. These policy adjustments are conditions for IMF loans and help to ensure that the country adopts strong and effective policies,” according to a statement in the IMF conditionality.
According to the US envoy, it was important for the IMF to disburse the funds because of the country's debt challenges.
"I believe it is important for that disbursement to be given out because Kenya faces a very difficult situation," Whitman added.
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She added that despite the failed disbursement, there was still a possibility of Kenya accessing the loan following the upcoming meeting set to happen at the end of August 2024.
The Finance Bill 2024 was withdrawn by the President on June 26th after public demonstrations against the contentious bill.
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