HIGHER TAXES, JOB CUTS AS IMF RETURNS

THE IMF has announced a US$2.4 billion loan to Kenya with a raft of conditions whose effects will permeate the entire economy.

The loan is aimed at responding to the next phase of Covid-19 and reducing debt levels.

The first condition the IMF has attached to its loan is that Kenya must start living within its means.

That means freezing growth of the national budget, whose annual expansion has contributed to heavy borrowing.

The second is that the government must restructure or privatise parastatals that continue to bleed national coffers, a demand that has previously come with job losses.

IMF wants the national treasury to wean itself off borrowing and instead find alternative ways of raising more money through taxes.

In a statement, the Washington DC-based lender, said its technocrats and the Kenyan Government reached a staff level agreement on a 38-month programme.

IMF added that structural and governance reforms are in the offing to address weaknesses in some parastatals and strengthen transparency and accountability by implementing anti-corruption measures.

Past IMF structural reforms had mixed results and have been blamed for pushing many public servants to joblessness, with little to show in terms of savings.

Kenyans started paying for services at public hospitals and schools as part of the infamous cost-sharing experiments that plunged hundreds of thousands into destitution. - DAILY NATION, Kenya