Treasury Cabinet Secretary nominee John Mbadi has come out to absolve the International Monetary Fund (IMF) of blame in Kenya’s debt and tax woes, that have occasioned mass protests across the country over the past two months.....CLICK HERE TO READ THE FULL ARTICLE>>>
According to Mbadi, who spoke during his vetting by Parliament’s Committee on Appointments on Saturday, the IMF does not necessarily bulldoze its way into a country, but is rather invited in.
Mbadi stated that Kenya was previously operating independently and financing its own activities, but was forced to return to the IMF for assistance after the Covid-19 pandemic among other factors that affected the country’s ability to keep moving solo.
He stated that Kenya’s agreement with the IMF entails raising revenue avenues, but noted that the rate can be modified so as not to burden taxpayers too much.
“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 programme. 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.
“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 programme that for us to tap into that loan, what we must do in fact 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 programme, which I don’t think should be long.”
Mbadi further opined that Kenya needs to start weaning itself off the shackles of the IMF, and return to the days when it was financing itself internally.
He stated that the country’s tax to Gross Domestic Product (GDP) ratio needs to be taken back to a rate of 18%, stating that this will pump an additional over Ksh.600 billion into 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 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...CONTINUE READING>>
