The Relationship Between Higher Taxes in Finance Bill, 2024 and Kenya Securing Ksh575 Billion IMF Loan

Foreign Affairs Principal Secretary (PS) Korir Sing’oei has revealed that the key to unlocking a Ksh575 billion loan from the International Monetary Fund (IMF) for Kenya lies in the tax measures proposed in the Finance Bill 2024. Speaking during a press briefing on President William Ruto’s state visit to the US, PS Korir emphasized the importance of revenue collection in determining when the IMF would release the loan.

The PS explained that Kenya must demonstrate its ability to raise revenue to honor international debt obligations, a condition set by the World Bank and IMF. The ongoing discussions with the IMF revolve around tax measures and revenue-raising proposals put forth by the government in the Finance Bill. However, the approval of these measures in Parliament is crucial for accessing the loan.

PS Korir expressed regret over the stringent conditions imposed on African countries, including Kenya, when seeking loans from foreign markets. This issue was set to be addressed by President Ruto during a bilateral meeting with US President Joe Biden. The PS called for a radical shift in the terms and conditions for accessing credit in Africa.

Initially, the IMF had cited the prolonged review process due to the flood crisis in the country. However, the focus now remains on the approval of the tax measures outlined in the Finance Bill to pave the way for the release of the much-needed loan for Kenya’s economic development.