Nigel Clarke took over as the second Deputy Managing Director of the International Monetary Fund (IMF) on October 31, the same day the fund completed its seventh and eighth reviews of its multiyear programme with Kenya.
He made Nairobi his first port of call following his appointment this week and took media queries on Kenya’s relationship with the IMF following meetings with President William Ruto, Treasury Cabinet Secretary John Mbadi and Central Bank of Kenya Governor Kamau Thugge.
What is your expectation from this maiden trip to Kenya?
The purpose of the trip has been to listen to diverse perspectives and engage with a variety of stakeholders, to learn, to understand nuances and to ensure that we can incorporate these learnings into our work here in Kenya.
We have had the opportunity to receive feedback, to hear varying points of view on economic and social developments, challenges, obstacles as well as opportunities.
This has provided a much deeper perspective on the range of challenges that exist and opportunities than can enable us to support Kenya, in meeting those challenges.
The timing of your visit comes in the backdrop of opposition to new taxation measures, mirrored by the deadly street protests in June, has this got anything to do with the tour?
The way to see my visit is that it’s quite organic. The Kenya programme is extremely important for the IMF and one of the largest anywhere in the world. As a new Deputy Managing Director, you are going to go to areas that are significant to the fund and hence my trip here.
The IMF was blamed for a lot of tax proposals made under the Finance Bill, 2024 based on the advice you offer to the authorities, what would be your take on this reprimanding?
The IMF provides directional advice that is designed to assist in achieving fiscal and external sustainability. The toolkit available for achieving those reforms is varied.
In the process of providing advice, we always ensure a range of options is discussed and put on the table. Specific revenue policies that are implemented are in the sole purview of the Kenyan government.
I understand some of the misconceptions that exist, but I don’t want to dwell in the past, but it’s important to clarify that specific revenue measures are not a design of the IMF and are totally within the purview of the government.
The objective of the IMF in a programme engagement such as the one we have with Kenya is transparent and clear. We are on the side of the Kenyan people, in desiring for Kenya- macroeconomic stability, external, fiscal and debt sustainability.
That’s the backdrop that can best provide the opportunity for prosperity for the Kenyan people. What we seek to do is to advise on policy approaches that are best suited to achieve and maintain those outcomes. At the end of the day, specific policy choices and particularly revenue choices have to be taken by the Kenyan authorities taking into consideration what is socially and politically feasible.
Kenya and the IMF have been engaged on a multi-year programme since April of 2021, do you feel that this programme which now approaches its sunset date has met its expected outcomes?
The way I would look at it is over the duration of time the programme has existed, Kenya has faced a number of exogenous shocks be it weather, war and peace, price/inflation and an achievement that the Kenyan people can be proud of is that the country has been able to weather those shocks in the context of a programme and emerge more resilient, than it was at the beginning of the programme.
Having said that, there is still a tremendous amount of work to be done. Kenya is by no means out of the woods, and we have already placed on record that debt vulnerabilities continue to exist.
Kenya did ask for governance diagnostics from the IMF, when does it start and how long will it take?
The IMF views questions on governance as macro-critical, as such we must concern ourselves with governance reforms. In that light we welcome the authorities request for governance diagnostics.
We expect a mission will be fielded early in the new year, in pursuit of this governance diagnostic and that it will be a consultative exercise engaging a diverse range of stakeholders, who will share their views of where there are shortcomings and where they would like to see improvements.
The governance diagnostic is not a panacea by itself, and it does not and cannot resolve all of the governance issues in Kenya but what it can do is allow a roadmap of reforms to emerge which can be incorporated over time to improve governance outcomes in Kenya.
Is the IMF looking to extend its engagement with Kenya beyond the lapse of the current programme mid next year?
The IMF is here to support Kenya in the best way possible, and we have a number of means of supporting the country whether inside a programme or outside of it. It would be very premature to go beyond that, but the message to transmit is that the IMF is here for Kenya.
