Treasury CS Nominee John Mbadi Defends IMF amid Public Uproar
Treasury Cabinet Secretary nominee John Mbadi has cleared the International Monetary Fund (IMF) of responsibility for Kenya’s debt and tax issues, which have led to widespread protests across the nation over the past two months.
During his vetting by the Parliament’s Committee on Appointments on Saturday, Mbadi clarified that the IMF does not force its way into a country but is invited by the government.
Mbadi explained that Kenya previously managed its finances independently but was compelled to seek IMF support due to the COVID-19 pandemic and other factors that disrupted the country’s ability to operate independently.
He mentioned that while Kenya’s agreement with the IMF involves exploring new revenue sources, there is room to adjust the rate to minimize the tax burden on citizens.
“I want to be very clear on IMF…IMF will never invite themselves to a country, we do invite them, and agree with them on a program. There was a period we were not under IMF, but because of challenges, occasioned largely by Covid-19, and the drought in the region, and the global disturbance of the supply chain, we then went back to IMF in 2020/2021,” he said.
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“But I have looked at what are these conditionalities. You know sometimes we may blame IMF for nothing. We have agreed with them on a program that for us to tap into that loan, what we must do is one key thing; revenue mobilization. So we just need to agree on how we can convince IMF for the period that we’re going to be under their program, which I don’t think should be long.”
Mbadi suggested that Kenya should begin reducing its reliance on IMF support and aim to return to a time when it was self-sufficient financially.
He also mentioned that the nation’s tax-to-gross Domestic Product (GDP) ratio should be increased to 18%, which would add over Ksh.600 billion to the National Treasury.
“We must move to a system where we divorce ourselves from IMF, and depend on ourselves as we were doing before, but that we can only do by doing what can be done in the interest of the country,” stated the former Nominated MP.
“They want us to maintain a deficit of no more than 4.4%, that’s what we have agreed on currently, but we’re moving towards a budget deficit in the region of 2.5-3%. I know the government has talked about 3.1%, we can sustain a financing gap of 3%. With that, you will not need IMF intervention.”
He added: “If we take back our tax revenue to GDP to 18%, we will be adding to our exchequer not less than Ksh.600 billion, and I think it is achievable.”
Treasury CS Nominee John Mbadi Defends IMF amid Public Uproar
