IMF Conditions for Kenya’s Loan Approval
The IMF set tough conditions for Kenya after approving a multibillion-dollar loan, including the overhaul of loss-making state-owned enterprises to improve profitability or operational efficiency. Thousands of civil servants may lose their jobs as part of the planned restructuring, with some agencies to be merged or wound up.
Recommendations from Treasury and Economic Advisors
The National Treasury, along with economic advisors, recommended measures to cut government expenditure, including the merging of state agencies with duplicate functions. A High-Level Fiscal Risk Committee was established to evaluate fiscal risks from state corporations and agencies.
Proposed Mergers and Axing of State Agencies
Several state agencies are set to be merged or axed to streamline operations and reduce redundancy.
1. Postal Corporation of Kenya + Kenya National Shipping Line – The two institutions were mandated to partner with a strategic investor who would inject capital into last-mile destinations, cargo shipments, clearing, and forwarding.
2. Commission for University Education + Kenya National Qualifications Authority The merging of the two bodies would create a new regulator to enhance quality education.
3. Special Economic Zones Authority + Export Processing Zones Authority A new entity from the merger of the two institutions will be mandated to create an enabling environment for investors to thrive.
4. Sports Kenya + Kenya Academy of Sports Sports Kenya and the Kenya Academy of Sports will be merged to create one entity for promoting and developing sports.
5. National Commission for Science, Technology and Innovation + Kenya National Innovation Agency One institution is foreseen to enhance innovation and research. The Research Fund could be included.
6. Women Enterprise Fund + Youth Enterprise Development Fund + Uwezo Fund
The trio will form one entity to enhance access to affordable credit for women, youth groups and people living with disabilities.
7. Kenya Copyrights Board + Kenya Industrial Property Insititute One body will be formed to enhance synergy in patent intellectual and industrial property registration.
8. Kenya Yearbook Editorial Board + Tourism Research Institute + Kenya Tourism Board + Kenya Investment Authority + Kenya Export Promotion and Branding Agency These institutions will be merged to form one entity that will market Kenya as an investment and tourist destination.
9. Commodities Fund + Agricultural Finance Corporation The two will form one institution to help farmers access affordable credit to enhance food production.
10. National Council for Law Reporting + Kenya Law Reform Commission One body will coordinate law reviews and publication of law reports.
11. National Syndemic Disease Control Council + National Cancer Institute of Kenya
The merged body will manage and coordinate chronic and syndemic diseases.
12. Kenya Forest Service + Kenya Water Towers Agency These two will form one corporation to protect forests and water towers countrywide.
13. Kenya Water Institute + Regional Centre on Ground Water Resources, Education, Training and Research Deal with water resource management, training and research.
14. Presidential Awards-Kenya + National Heroes Council Tasked with identifying and honouring distinguished Kenyan citizens.
15. Kenya Cultural Centre + Bomas of Kenya One body will now promote Kenya’s cultural diversity and heritage. What was William Ruto’s order to state agencies?
President Ruto’s Directive
President William Ruto ordered state agencies to live within their means, urging profit-making entities to cut recurrent expenditures by 30% and avoid unnecessary purchases. He highlighted the financial burden certain agencies have placed on the government.
Other IMF Conditions
In addition to overhauling state-owned enterprises, the IMF directed the implementation of a common payroll system, a review of asset declaration and conflict of interest rules for senior public officials, and the promotion of fiscal transparency through the publication of procurement information.
