The International Monetary Fund (IMF) on Friday stressed the importance of new anti-corruption and good governance legislation to the future of the Kenyan economy.
There was a need for "a vigorous anti-corruption strategy as part of a wider programme of governance reforms... to generate the conditions for stronger per-capita income growth in Kenya", the IMF said in a statement following recent annual consultations with the Kenyan government.
IMF and Kenyan government officials have recently been engaged in discussions on the future of the Kenyan economy, including prospects for the resumption of aid to the East African country. "The Bretton Woods institutions are making corruption a precondition for releasing any more cash for development and recurrent expenditure to the government," a local governance expert told IRIN on 10 April.
The IMF suspended aid to Kenya in late 2000 because of the government’s failure to fulfil promises on tackling corruption and privatising the economy, which at the time was experiencing its worst recession since independence in 1963, and last year actually shrank by 0.3 percent.
Kenyan Attorney-General Amos Wako recently tabled in parliament the Corruption Control Bill 2002, which seeks to establish a new independent body to fight corruption. If formed, the Kenya Corruption Control Authority would assume the functions of the defunct Kenya Anti-Corruption Authority, as well as a recently established anti-corruption police unit.
The tabling of the new bill follows the release in March by the attorney-general of a graft report published by British experts appointed by Kenyan President Daniel arap Moi on 15 January to advise the government on possible anti-corruption measures. Recommendations from their report had been incorporated in the anti-corruption bill, as well as the Public Officers Ethics Bill 2002, local media reported in March.
The IMF urged the Kenyan government to "establish a code of ethics for civil servants, legislators, and the judiciary, as well as strengthening and better protecting the legal status of the Anti-Corruption Police Unit".
According to the IMF, the Kenyan economy faced "considerable" economic risks in the period ahead, including uncertainties associated with the presidential and parliamentary elections scheduled to take place by the end of 2002. In addition, Kenya's financial position could be jeopardised by an inability to maintain financial discipline, which would be "difficult without a resumption of external financing", the IMF warned.
The IMF said it was concerned that Kenya's macroeconomic and financial situation was "fragile", and that investor confidence in the country was very low.
"Kenya's economic performance during the past decade has been well below its potential, reforms have been slow, and there have been pervasive governance problems," The IMF noted. "As a result, Kenya's real per-capita GDP [Gross Domestic Product] is now lower than it was in 1990, and poverty is much more prevalent," it said.
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