IMF, World Bank Conditionalities: Ruto Steering The Country In The Right Direction
President William Ruto
By: Joseph Mutua Ndonga
Worth Noting:
- This is because he had allegedly succumbed to the machinations of the International Monetary Fund (IMF) and World Bank.
- Essentially, he was being held hostage by the Bretton Wood institutions.
- The Azimio La Umoja One Kenya Coalition critics would term the conditionalities imposed as a bitter pill to swallow. It means Kenyans will dig deeper into their pockets. This is at a time when they were already being overtaxed.
- I’m not holding brief for President Ruto. One thing is however clear. He inherited the IMF/World Bank prescriptions from his predecessor, President Uhuru Kenyatta.
- During Uhuru’s era, it dawned on IMF and World Bank that our economy was not doing well.
The efforts by President William Ruto to stabilize the Kenya shilling have started to bear the fruits. The latest media reports show the shilling is appreciating and becoming stronger.
Dr Ruto had attributed the depreciation of Kenya shilling against the US dollar to a number of factors.
Topping the list was: He inherited an economy that had been run down by the ‘handshake’ government.
The country was also facing the biting drought rated to be the worst in 40 years and reeling under the weight of Russian-Ukraine war.
The country was also being weighed down by heavy foreign debts. The repayment schedule of the loans amounting to trillions of shillings had started maturing.
The country was also recovering from the devastating effects of Covid-19 pandemic.
Here we are. Dr Ruto’s meant his words when he vowed to steady the ship in coming days.
With this, the President has proved wrong his critics who wanted Kenyans to believe that his efforts will not bear the fruits.
This is because he had allegedly succumbed to the machinations of the International Monetary Fund (IMF) and World Bank.
Essentially, he was being held hostage by the Bretton Wood institutions.
The Azimio La Umoja One Kenya Coalition critics would term the conditionalities imposed as a bitter pill to swallow. It means Kenyans will dig deeper into their pockets. This is at a time when they were already being overtaxed.
I’m not holding brief for President Ruto. One thing is however clear. He inherited the IMF/World Bank prescriptions from his predecessor, President Uhuru Kenyatta.
During Uhuru’s era, it dawned on IMF and World Bank that our economy was not doing well.
The Bretton Woods institutions took advantage of this to rollout their prescriptions.
Left with no option, President Uhuru had to cave in to their pressure.
I disagree with the critics. The privatization of state corporations stood as one of the key pledges that Dr William Ruto, Kenya Kwanza presidential candidate, made during campaigns.
As we know, the rules governing IMF and World Bank requires the two institutions to engage the sitting President. So, the critics’ claims were cheap, hollow and misplaced. President Ruto is implementing what he promised Kenyans.
Yes, IMF headquarter is in America and the President has made a number of trips to that country.
It is also true that President Ruto has been holding talks with the President of IMF.
You cannot however use this as a basis of making such claims.
The recent social media reports have been alleging that Dr Ruto has so far signed up foreign loans worth billions of shillings.
In most cases, the critics would come out of blue to publish these alarming claims.
They would not tell us where they got this information.
As a way of fooling the masses, they would feature a photo of the Kenyan head of state and the President of IMF taken a long time ago.
Ruto’s critics would further allege. Ruto said during the campaigns that his administration will never go for foreign loans.
Today, he is doing the opposite. He had borrowed more than his predecessor. I would call this a big lie because they were yet to provide any documentary evidence. I would have expected them to do a scientific and well-researched comparative analysis.
President Ruto has not changed his position.
What he meant during the campaign is that he will reduce in a big way the insatiable appetite for borrowing foreign loans that was the hallmark of the previous administration.
He has kept his word. The money that his administration has borrowed so far is a drop in the ocean.
It is worth noting that the IMF and World Bank have been partnering with many countries across the world.
In Kenya, the two institutions have been working together with the leaderships of the successive governments of Independent Kenya. This is on matters of resuscitation of economy and development.
They made the most memorable interventions during the era of President Daniel Arap Moi.
Upon realizing our economy was doing badly, they started to engage Moi and his administration.
This led to Bretton Wood unveiling Structural Adjustment Programmes (SAPs).
The public opinion was divided. Some supported the conditionalities and others argued they had been imposed terming them as a bitter pill.
President Moi had formed a team, dubbed the Dream Team, to coordinate and oversee the implementation of the SAPS. The team was led by Richard Leakey.
So, the lesson we learn here is that the pain of the IMF and World Bank prescriptions is for a while. The situation improves and get better thereafter.
Besides Moi, William Ruto’s predecessors Mwai Kibaki and Uhuru Kenyatta have had engagements with Bretton Wood Institutions. This heralded in accepting the loans they offered and conditionalities attached.
Each administration would also prioritize on the issue of enhancing and expanding tax collection base. This is by drafting and enacting tax regime to fast track the process. President Kibaki is the one who had coined a slogan ‘Kulipa Ushuru Ni Kujitegemea’.
A day had been set aside to cerebrate and reward Kenyans who paid their full taxes on time, thus complying with tax laws and regulations. Just like Ruto, Kibaki and Uhuru would mince no in calling on tax man to pursue tax defaulters. Every Kenyan must pay their taxes.
Some of Uhuru’s meetings with Bretton Wood were held in US.
He had also made numerous trips to the USA. At one point, it dawned on President Uhuru that the economy was doing badly.
In the meantime, the Bretton Institutions were pilling pressure on him to allow them to intervene. He had no option but to succumb.
So, President Ruto took over at a time when the IMF and World Bank had already rolled out their prescriptions. His predecessor had signed them. It is therefore hard for Dr Ruto to get out. Uhuru is one who had been held hostage. Ruto is working hard to undo this.
He has so far made great strides towards rebuilding of our economy. He knows this is only way that can make them leave our country on their own volition.
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