• For years, the IMF has been a key player in Kenya’s economic landscape, and its interventions have drawn both support and scepticism
• The Bretton Woods institution runs the Extended Fund Facility and Extended Credit Facility programme with Nairobi
• David Ndii said tax cuts will remain unattainable as long as Kenya sticks with the International Monetary Fund (IMF) programme

TUKO.co.ke journalist Japhet Ruto has over eight years of experience in financial, business, and technology reporting and offers profound insights into Kenyan and global economic trends.

President William Ruto’s economic adviser, David Ndii, has told Kenyans to brace for tough times ahead amid higher taxes.

Why Kenyans won’t get tax relief

Speaking at the NCBA Economic Forum in Nairobi on Wednesday, November 6, Ndii stated that tax cuts will remain unattainable as long as Kenya sticks with the International Monetary Fund (IMF) programme.

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“I want to make reference to something I said before, when you are in an IMF programme, you are in receivership. There is no relief, you are only going to get relief when you get out of receivership,” he explained.

Ndii argued that there’s no question of relief being provided to Kenyans considering the structural reforms under IMF.

“When companies are in receivership, they cut costs; they lay off people, and the turnaround is costly. That is why some countries are where they are; they are in cycles of macroeconomic crisis. What you want to do is the structural things that we are doing, we can’t keep going back to the question of how much relief we are providing,” he expounded.

Why IMF’s programme doesn’t work for Kenya

For years, the IMF has been a key player in Kenya’s economic landscape, and its interventions have drawn both support and scepticism.

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Known for its “one-size-fits-all” approach to addressing economic challenges in countries around the globe, the IMF’s strategies have often been applied uniformly, regardless of a nation’s unique circumstances.

However, this blanket method has faced growing criticism, particularly in Kenya, where its effectiveness has been questioned.

Why Kenya risks loan default

In its November 2024 report, the IMF warned that Kenya could default on its loan obligations driven by low revenue collections and export underperformance.

In its seventh and eighth reviews under the Extended Fund Facility and Extended Credit Facility, the Bretton Woods institution noted the public debt had increased to 73.1% of GDP in June 2024.

The IMF revealed Nairobi has one of the largest interest bill-to-revenue ratios in the region.

Source: TUKO.co.ke