IMF delays Kenya aid decision further - FT

NAIROBI, Mar 10 (Reuters) The International Monetary Fund (IMF) will delay further a decision on lending to Kenya following fresh corruption allegations, the Financial Times today reported.

President Mwai Kibaki's government has been plagued by accusations of graft which have forced three of his key ministers to resign. They all deny involvement in corruption.

''The meeting was called off after it became clear the fund's members would not have approved the 72 million dollars loan following fresh corruption allegations,'' the Financial Times quoted Jurgen Reitmaier, IMF country representative, as saying on its Web site.

It did not specify the nature of the allegations, but the Kenya anti-corruption agency said on Tuesday it had made recommendations to the attorney general after probing graft allegations involving central bank governor Andrew Mullei.

The IMF board was scheduled to meet at the end of December but the meeting was postponed to February after Kibaki sacked his entire cabinet without which the government was unable to sign contractual documents.

Kibaki dismissed his cabinet on November 23 after voters rejected a new constitution he had backed.

''We hope now to resume discussions around the spring (April) meeting in Washington. We also hope that the critical donor support will come together by that time,'' Reitmaier told the Financial Times.

Neither the IMF's country director in Kenya nor the Kenyan Finance Ministry was available to comment on the report.

The 72 million dollars would be the third and final tranche in a three year 327 million dollars loan.

The IMF and foreign missions have called for a tougher fight against graft in Kenya, east Africa's biggest economy.

''The big one is the corruption issue. As far as the IMF and the World Bank are concerned, they don't seem to see whether we are solving it or just buying time,'' Jasper Okelo, an economist with the University of Nairobi told Reuters.

''Time has come for us to manage our economy so we can depend on ourselves. We should do things well enough so we can attract investors.'' REUTERS SY RK2023