IMF Supports Ruto’s Plan To Have Kenyans Abroad Raise Money For Govt
On Monday, January 5, the International Monetary Fund (IMF) extended its assistance to President William Ruto’s administration in the endeavor to raise a diaspora bond.
The IMF’s action followed a statement made by Prime Cabinet Secretary Musalia Mudavadi, who revealed that the Kenya Kwanza government planned to issue a bond aimed at Kenyan expatriates. This bond would be facilitated through the World Bank’s Multilateral Investment Guarantee Agency (MIGA) and the National Treasury.
A diaspora bond serves as a strategy employed by developing nations to generate funds by offering expatriates fixed-income investment loans.
Abebe Aemro, the Director of the IMF African Department, commented that the bond would alleviate the current financial challenges facing Kenya.
Abebe responded to a query posed by journalist Julians Amboko regarding Kenya’s readiness to re-enter the global bond market.
“In due course, Kenya will be able to return to markets and I hope that conditions will have eased so that this can be sooner rather than later,” he remarked.
“This includes, of course, trying new instruments like perhaps the diaspora bond that Kenya’s government has been talking about. I think we are hopeful that Kenya’s progress will continue.”
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Furthermore, the Director of the IMF African Department commended the reforms implemented by the government led by Ruto to stabilize Kenya’s debt.
“We see in Kenya very solid and very strong effort having been made to make sure that macroeconomic imbalances are contained,” Abebe remarked.
He highlighted the fiscal reforms initiated by the National Treasury and the Central Bank of Kenya aimed at stabilizing and decreasing the national debt.
Mudavadi, when introducing the bond, mentioned that it was expected to provide more attractive returns compared to the interest rates in the original markets for diaspora remittances.
“The bond will enable the Government to diversify its public debt mix, reducing our exposure to costly commercial debt,” he added.
Kenya, along with India and Israel, is among the leading nations that rely on their expatriate communities to generate funds for development initiatives through diaspora bonds.
IMF Supports Ruto’s Plan To Have Kenyans Abroad Raise Money For Govt