7 January 2014

Kenya: Uhuru Puts Kenya's Case to IMF Boss

Nairobi — The government has sought for more cash from the International Monetary Fund (IMF) to deal with potential economic shocks going forward.

Speaking at State House in Mombasa, President Uhuru Kenyatta said the government needed to be cautious as the country remained vulnerable to future shocks which must effectively be dealt with.

Kenyatta who hosted the visiting IMF Managing Director Christine Lagarde, said the government would borrow the funds under Poverty Reduction and Growth Trust, which is a lending arm of IMF to the developing countries.

"Kenya has almost exhausted the concessional window under the Poverty Reduction and Growth Trust. We are therefore looking for an arrangement that can blend these funds with the General Resources Account (GRA) to increase available resource to build an effective buffer," he said.

The Head of State said the country needed an insurance-type facility that can be accessed as and when needed with sufficient resources to effectively handle short-term shocks.

Having successfully completed the three year Sh65 billion Extended Credit Facility given in 2011, Kenyatta said the government would be ready to continue its cooperation with IMF.

The extended credit facility that was put in place three years ago implemented monetary policies that have helped tame inflation and accumulated resource reserves.

Kenya's Inflation rates in November hit a high of 19.72 percent but were later managed downwards to a single digit in 2013.

"Considering the progress we have made so far, I believe that there is sufficient justification for such a partnership but I will leave this to you and your staff to ponder. My officers from the National Treasury are ready to provide any information or analysis that may be required to support this request," the president added.

On her part, Lagarde commended Kenya for undertaking ambitious programmes to accelerate economic growth and improve the lives of the citizens hence setting economic standards in the region.

She said the programmes would also cushion Kenya incase of economic turmoil and external potential shocks.

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