The Treasury CS nominee, John Mbadi, said something important about the IMF program. He further stated that the IMF did not introduce itself to the country, but rather the people of Kenya did.
“They or the IMF want us to keep our budget deficit at 4.4% of GDP; we agree,” Mbadi said.
Given that the fund’s initial target or condition was 4.0% of GDP, economists strongly believe Mbadi was referring to agreements between the GOK and IMF regarding how to modify the US$3.6 billion program after the Finance Bill 2024 withdrawal.
So the IMF has most likely extended Kenya’s 40.0bps concession on the deficit target following the collapse of Finance Bill 2024, which targeted Kes 346.7 billion in additional revenue.
Last week, Prime CS stated that GOK had submitted a request to the fund ahead of the end of the August Executive Board meeting in Kenya.
John Mbadi said, “I don’t think the solution to revenue mobilisation is coming up with new taxes.
“The solution should target the tax collector. KRA is like a cow, which we milk without feeding. The system that KRA is currently using requires engineering.”
The Treasury CS nominee aims to introduce to Parliament the beneficial provisions found in the Finance Bill 2024.
“With proper public participation, we can introduce a specific amendment to those acts, restoring the good provisions lost by this bill, which are not contentious but can still help this country grow its economy.”
