Kenya can survive EU sanctions, says IMF
The
International Monetary Fund has said Kenya’s economy will not suffer
adverse effects if the European Union imposes sanctions on a Uhuru
Kenyatta government.
Visiting deputy IMF director Domenico Fainizza said Kenya’s economy can weather the consequences of EU sanction, as exhibited by its resilience during the world economic crisis and the Euro crisis.
“Kenya is much less dependent on the European countries than before and as witnessed when exports to Europe stagnated. The drivers of Kenya’s economic growth have been domestic based, including the ICT and financial sector and increased investments by the growing number of the middle class ,” Fainniza said.
Some EU member countries have threatened to slap sanctions on Kenya if the Jubilee Alliance, whose presidential candidate is Uhuru, win the March 4 elections.
Uhuru and his running mate William Ruto are facing crimes against humanity charges at the International Criminal Court. Fainizza said the country can boost its economic strength to withstand any shocks from drastic actions by European Union member countries.
The deputy director, who was in the country for the fifth review of the Extended Credit Facility, said the IMF will work with anybody who is elected to lead the country regardless of the ICC cases.
The review concluded that Kenya has faired well despite the difficult circumstances posed by the global crisis, high cost of the Operation Linda Nchi in Somalia, and the ongoing electoral disruptions.
The IMF predicts that Kenya’s economy will grow by between 5.5 and six per cent this year. However, it cautioned that any violence before, during or after the elections will reduce the growth.
“If the elections are concluded peacefully, we see a high rate of development as investments start kicking in immediately,” said Fainizza. The IMF mission recommends that external borrowing should be controlled to avoid unmanageable debt burden.
“Improved expenditure control should allow social and development expenditures to rise, as non priority expenditure falls,” Fainizza said.
The report recommends fast tracking of the intended sale to the public of the Nairobi Stock Exchange to enhance transparency and attract more investors as well as the establishment of a futures and commodities exchange.
The fifth programme review of the Extended Credit Facility is set for approval by the IMF executive board in April, after which Sh9.35 billion will be released.
The IMF had initially approved Sh43 billion in January 2011 under a three year extended credit facility arrangement, and reviewed it upwards a year later to avail Sh64 billion.
Visiting deputy IMF director Domenico Fainizza said Kenya’s economy can weather the consequences of EU sanction, as exhibited by its resilience during the world economic crisis and the Euro crisis.
“Kenya is much less dependent on the European countries than before and as witnessed when exports to Europe stagnated. The drivers of Kenya’s economic growth have been domestic based, including the ICT and financial sector and increased investments by the growing number of the middle class ,” Fainniza said.
Some EU member countries have threatened to slap sanctions on Kenya if the Jubilee Alliance, whose presidential candidate is Uhuru, win the March 4 elections.
Uhuru and his running mate William Ruto are facing crimes against humanity charges at the International Criminal Court. Fainizza said the country can boost its economic strength to withstand any shocks from drastic actions by European Union member countries.
The deputy director, who was in the country for the fifth review of the Extended Credit Facility, said the IMF will work with anybody who is elected to lead the country regardless of the ICC cases.
The review concluded that Kenya has faired well despite the difficult circumstances posed by the global crisis, high cost of the Operation Linda Nchi in Somalia, and the ongoing electoral disruptions.
The IMF predicts that Kenya’s economy will grow by between 5.5 and six per cent this year. However, it cautioned that any violence before, during or after the elections will reduce the growth.
“If the elections are concluded peacefully, we see a high rate of development as investments start kicking in immediately,” said Fainizza. The IMF mission recommends that external borrowing should be controlled to avoid unmanageable debt burden.
“Improved expenditure control should allow social and development expenditures to rise, as non priority expenditure falls,” Fainizza said.
The report recommends fast tracking of the intended sale to the public of the Nairobi Stock Exchange to enhance transparency and attract more investors as well as the establishment of a futures and commodities exchange.
The fifth programme review of the Extended Credit Facility is set for approval by the IMF executive board in April, after which Sh9.35 billion will be released.
The IMF had initially approved Sh43 billion in January 2011 under a three year extended credit facility arrangement, and reviewed it upwards a year later to avail Sh64 billion.
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