Major shareholders at the International Monetary Fund are urging Kenya to request an IMF review of corruption and governance issues in an effort to unlock stalled lending, according to two diplomatic sources.
The release of about $600 million, under an IMF program set to expire next year, has been delayed since the Kenyan government withdrew $2.7 billion in tax hikes in June following widespread protests.
These protests, which resulted in over 50 deaths, highlighted concerns about corruption and poor governance.
Many young demonstrators voiced frustration, accusing politicians of using taxpayer money to finance extravagant lifestyles.
Western governments have been pushing for an IMF-led governance diagnostic to assess corruption and governance risks, according to the two sources, who spoke on condition of anonymity due to the sensitivity of the discussions.
A governance diagnostic must be initiated by the country itself. One source indicated that such a request from Kenya would help pave the way for discussions regarding continued IMF support.
Kenya’s finance ministry did not respond to requests for comment, and spokespeople for the IMF, based in Washington, also did not provide an immediate response.
Since 2014, the IMF has released governance diagnostic reports on 14 nations, including Ukraine, Cameroon, and Sri Lanka, with additional assessments currently in progress, according to the IMF’s website.
Kenyan authorities are searching for new ways to raise revenue after withdrawing the proposed tax hikes.
In August, Finance Minister John Mbadi stated that the government would need to reinstate some provisions from the scrapped tax bill.
However, last month, Mbadi announced he would seek public input on new legislation aimed at increasing revenue.
Diplomatic sources indicate that the government must present a credible plan to reduce its fiscal deficit before the IMF will consider resuming disbursements.
YOU MAY ALSO READ: School bus fire in Thailand leaves 25 feared dead, several hospitalised