OKOA UCHUMI CALLS ON IMF TO ENFORCE ACCOUNTABILITY, ADDRESS CORRUPTION, AND PROMOTE EQUITY IN KENYA’S FISCAL POLICIES.

OKOA UCHUMI CALLS ON IMF TO ENFORCE ACCOUNTABILITY, ADDRESS CORRUPTION, AND PROMOTE EQUITY IN KENYA’S FISCAL POLICIES

Okoa Uchumi Campaign, following our recent meeting with IMF officials, wish to highlight critical issues that require urgent attention to ensure that Kenya achieves sustainable development while addressing systemic governance challenges.

Public Debt and Corruption

Kenya is facing serious challenges including corruption as well as unsustainable debt levels that have strained public finances, limiting investments in infrastructure and social services. Rising corruption is undermining public trust and diverting resources from essential development projects, leading to inefficiencies and a lack of accountability among officials. Weak governance, characterized by inadequate law enforcement, further impedes policy implementation and oversight, making sustainable growth more difficult to achieve.

Unmet Commitments

The current program with the International Monetary Fund (IMF), which is nearing its conclusion, was designed to help Kenya tackle these issues. However, the government has repeatedly failed to meet its commitments under this program. Key reforms in areas such as public finance management, anti-corruption measures, and governance have either not been implemented or have only been partially addressed. Despite these shortcomings, the IMF has continued to disburse funds during program reviews without ensuring that the agreed-upon conditions were fully met. This practice undermines

accountability and weakens the necessary reform agenda to improve Kenya’s economic outlook.

Austerity measures

The austerity measures enforced under the current IMF program have significantly affected Kenya’s vulnerable populations. The budget cuts to essential public services like healthcare, education, and social welfare have worsened inequality, widening the gap between the wealthy and the poor. Women, children, and the elderly are particularly affected by these reductions, facing increased economic challenges, job losses, and unemployment. It is essential that future programs prioritize social equity and protect human rights, ensuring the needs of the most vulnerable are addressed.

As the current program ends, there are clear indications that the government will be seeking a new IMF-supported program. As such, the IMF has a responsibility to ensure that the gaps in the current program are addressed before onboarding the government on new arrangements. Entering a new program without resolving past issues will further erode public trust in the government as well the IMF’s role and effectiveness.

The Campaign therefore raise the following concerns and recommendations;

Accountability Before New Agreements: The IMF must take a firm stance in holding the Kenyan government accountable for its failure to meet the conditions and honor the commitments of the current program. Before approving any new arrangements, it is important that the Fund ensures all outstanding commitments are addressed. This is particularly crucial in areas focusing on addressing corruption through reforms in public finance that reduce the existing vulnerabilities due to debt, reforms of state-owned enterprises among others.

Prioritization of Public Finance Reforms and Governance: The IMF has significant leverage and influence to advocate for much-needed public finance reforms. We urge the IMF to demand measures that tackle Kenya’s systemic corruption, improve budget transparency, and strengthen oversight institutions.

Inclusion of governance indicators in reviews and future programs: Governance is central to the economic challenges facing Kenya, creating other problems in state finances. The Governance Diagnostic Review by the International Monetary Fund (IMF) is significant for a country like Kenya because it provides a comprehensive assessment

of governance issues impacting economic stability, growth, and public trust. The IMF should include strong governance and anti-corruption indicators in its ongoing governance diagnostic review for Kenya and future programs. It is essential to integrate the GCD framework into these initiatives to promote transparency and accountability. We are committed to leading the citizen’s governance diagnostic and propose solutions that we believe will take us on a path of economic recovery.

Impactful engagement with the non-state actors: For an impactful engagement with the civil society organizations,private sector, media among others, we urge the IMF to ensure meaningful participation of civil society in Kenya by amplifying our concerns to ensure they are heard during negotiations with the government. This is because our role is to ensure that citizen concerns are reflected in economic policies and reforms. Okoa Uchumi and other CSO members have a unique ability to assist in implementing and monitoring these reforms and reporting on their impact using macroeconomic parameters and macroeconomics, always conducting a broad human rights and economic impact assessment.

The IMF should establish a clear and formal process for civil society to contribute to its negotiations with governments, especially regarding the development of suitable governance conditions. Engaging Kenyan citizens and civil society in these reforms is essential since their enthusiasm and skills enable them to monitor implementation effectively, fostering transparency and progress for everyone

We call upon the IMF to leverage its power, influence, and unique position to advocate for a reform agenda that tackles Kenya’s most critical challenges. This is because the IMF plays several roles; lender of last resort, thought leader in macroeconomic management, and determiner of debt sustainability & credit worthiness, among others. Together, we can ensure that Kenya’s economic policies promote equity, transparency, and sustainable development.

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The Okoa Uchumi campaign is a civil society platform committed towards working with stakeholders to resolve Kenya’s public debt crisis. The campaign advocates for balanced and equitable budgets as a means of achieving debt sustainability and economic inclusion. The campaign seeks to bolster constitutional safeguards in public debt management and to push for the accountability of political leaders in public debt management.