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IMF in Kenya, holds talks on new funding

Written by: Staff

NAIROBI, May 12 (Reuters) A long awaited International Monetary Fund (IMF) mission is in Kenya to discuss a new loan programme for the July 2006-June 2007 fiscal year, the finance ministry said in a statement seen by Reuters today.

The delegation is in the east African country following a meeting by Finance Minister Amos Kimunya at the end of March with the IMF's Managing Director Rodrigo Rato on Kenya's anti-corruption efforts.

The IMF and World Bank recently said they were delaying millions of dollars in aid to Kenya due to corruption scandals that have rocked President Mwai Kibaki's government.

The Netherlands said last month it was suspending aid to Kenya worth 118 million dollars euros over corruption concerns.

''The review mission...arrived in the country...with a view to reaching an agreement on a letter of intent by mid-May 2006 and agreeing on an economic reform programme for financial year 2006/07,'' the statement released late yesterday said.

The mission, which will be in Kenya for two weeks, has already met with finance ministry officials and is scheduled to hold discussions with more government officials, businessmen and civil societies.

IMF and government officials were not available for further comment.

East Africa's biggest economy has been hit by two main corruption scandals. Revelations in the Anglo Leasing scam and a separate and even bigger scandal known as the Goldenberg saga have forced three ministers to quit in Kibaki's biggest crisis since taking power in 2002 on pledges to end rampant graft.

But donors have said the resignations are not enough.

Donor aid contributes slightly less than 10 per cent of Kenya's annual budget of about 5.8 billion dollars.


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