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From newsdesk@igc.apc.org Tue Jan 11 12:08:03 2000
Date: Sat, 8 Jan 2000 15:49:09 -0600 (CST)
From: IGC News Desk <newsdesk@igc.apc.org>
Subject: ECONOMY-KENYA: New Pressure Group Opposes IMF Plan To Resume Aid
Article: 86326
To: undisclosed-recipients:;

New Pressure Group Opposes IMF Plan To Resume Aid

By Judith Achieng', IPS, 6 January 2000

NAIROBI, Jan 6 (IPS) - Kenyan opposition groups have launched a new pressure body to campaign against the resumption of aid to the East African country by the International Monetary Fund (IMF).

Finance minister Chris Okemo said this week that an IMF team is expected in Kenya by Jan 24 to resume negotiations which will lead to the eventual resumption of aid suspended three years ago.

The new lobby group, made up of eight opposition members of parliament, lawyers and civil society, is unconvinced that the government of president Daniel arap Moi has met all the conditions set by the IMF to warrant resumption of aid to Kenya.

The pressure body, known as Stakeholders Support Group (SSG) also challenges the Bretton Woods institution to tabulate achievements made by Moi's government on each of the conditions it had set, if it is truly committed to ensuring accountability and transparency in Kenya.

"We are deeply surprised that the IMF is now convinced that the government has put in place sufficient reforms to merit the resumption of aid to Kenya," the group's spokesperson Apollo Njonjo told journalists this week.

The IMF and other major donors suspended funding to Kenya in July 1997 citing inability by Moi's government to stamp out official corruption which has seen millions of shillings from government treasury going into the pockets of a few individuals close to power.

Since then, many development projects have stalled in the East African country, roads have deteriorated and have become impassable due to lack of maintenance.

The IMF says Kenya needs a significant and sustained efforts to curb corruption in the government before it can put in place a new lending programme.

But the government says it has fulfilled all the conditions spelt out, which includes the setting up of an anti-corruption authority and trimming down of the country's bloated civil service.

Kenya seeks IMF aid under its subsidised Poverty Reduction and Growth Facility, which provides low interest loans to countries which cannot afford private loans with high interest rates.

In December last year, the IMF gave the go-ahead of final round of negotiations with the Kenyan government in a long process which is expected to result in resumption of aid this year.

For the government, resumption of aid at this point is crucial for its fragile economy, coming at a time when it is relying on IMF to settle 30 billion shillings required to pay off some 600,000 civil servants in its retrenchment programme.

With an average growth rate of about 1.7 percent, the former British colony's economy is at a near standstill, and the shilling which in 1997 used to change for 60 to the dollar has now fallen to 72.

Kenya is also ranked among the 40 developing countries that spend large shares of their revenues on servicing growing debts, with about 25 percent of its resources going back to donors, compared with 6.8 percent on education and 2.7 percent going to health.

The anti-aid lobby says the Bretton Woods institution would only be taking part in the political power game which has maintained Moi's regime for 21 years in power and which has impoverished Kenya's 30 million people. "The Kenyan people will not accept to pay back opaque loans contracted by a theft-ridden regime," says Njonjo.

The group also wants resumption of aid to Kenya tied to the constitutional reform process to reduce presidential powers, which has hit a snag, with the opposition accusing the ruling Kenya African National Union (KANU) of frustrating the process in a bid to maintain its hold on to power.

The constitutional reform process began in 1992, with the change of clauses which transformed Kenya into a multiparty state, and also reduced the head of state's term of service from life to a minimum of two five-year terms.

The lobby group says it fears the current constitution will give the ruling party power to extend Moi's term, which expires in 2002. The members have also accused the British government of prevailing upon the IMF to resume aid to Kenya in a bid to maintain Moi's regime, which, they say, has helped retain thousands of British Asians.

"We are aware of the activities of the British High Commission and (sir) Jeffrey James (High Commissioner) in particular, in cajoling the IMF, the World Bank and other donors into resuming aid under the guise of impeding the break up of the country," says Njonjo.

"The British have interpreted that the preservation of British Asians in Kenya can only be assured by the continuation of Moi and KANU at the helm of state affairs after 2002," he claims.

There has been no reaction from the British High Commission in Kenya.

Despite the campaign, economists say donor aid is badly needed to restore the Kenyan economy, only if the money will not end up in the pockets of a few individuals close to power.

"The government should not have power over the (donor) money anymore. Kenyans have become poorer, through corrupt deals and tendering procedures," says Beth Mugo, who runs the Nairobi-based Council for Economic Empowerment of Women in Africa (CEEWA).

"There is absolutely nothing wrong with aid. Our people just have the misconception that aid is free. They don't know that we have to pay for it," says Mugo.

Kenya's economic analyst, Robert Shaw agrees. "For any resumed donor support, the government has to be absolutely clear and transparent on how it's going to send the money. It is not a question of the money going into a pot," he says.

For ordinary Kenyans like Jackson Mwangi, a shoe shiner on a Nairobi street, the prospect of aid resumption is good news and those opposing it have not felt the pinch. "Ordinary Kenyans have been suffering since 1997. It is good that we are going to get aid finally," he says.

"Most of the people opposing aid are rich, their children are abroad, we are the ones who are suffering," he says.

Origin: Harare/ECONOMY-KENYA/

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