Nairobi — Treasury Cabinet Secretary nominee John Mbadi has opined that the International Monetary Fund (IMF) is not to blame for the draconian tax measures in the country which has led to public outcry in the country.
Mbadi explained harsh economic times in the country occasioned by Corona Virus Pandemic and biting drought pushed the Former President Uhuru Kenyatta's administration to seek the intervention of the international financial institution.
He spoke before the National Assembly Committee on Appointments chaired by Speaker Moses Wetangula.
"IMF will never invite themselves to a country, we do invite them, and agree with them on a programme. There was a period we were not under IMF, but because of challenges, occasioned largely by Covid-19, and the drought in the region we then went back to IMF in 2020/2021," he said.
Mbadi emphasized that IMF agreement with the country involved conditions on revenue raising mechanisms which is integral in accessing loan facilities.
"You know sometimes we may blame IMF for nothing. We have agreed with them on a programme that for us to tap into that loan, what we must do in fact is one key thing; revenue mobilization. So we just need to agree on how we can convince IMF for the period that we're going to be under their programme, which I don't think should be long," he told MPs.
Mbadi elaborated that the country needs to focus on revenue mobilization to divorce from IMF by returning the tax to Gross Domestic Product (GDP) ratio to 18 percent.
"We must move to a system where we divorce ourselves from IMF, and depend on ourselves as we were doing before, but that we can only do by doing what can be done in the interest of the country," the former ODM Chairman said.
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Mbadi has promised to publicize the debt portfolio in the country annually through publication of the country's debt records to uphold transparency.
He disapproved the current modus operandi of the government where taxpayers are left in the dark on the debt status despite being the bearers of the ballooning national debt which now stands at Sh10.5 trillion.
"If Kenyans owe people money, why can't they know who they owe, how much they owe them and the level of interest for each loan?If you listen to the discussion around debt, Kenyans seem to be asking what our actual level of debt is. Is it really Sh10.5 trillion? The answer could be Yes, but Kenyans want proof and evidence," he said.
He was responding to Deputy Speaker Gladys Boss, who tasked him to explain how he will tame the debt management which had scaled to 75 percent of the Gross Domestic Product (GDP) which is currently unsustainable.
Mbadi faulted successive regimes since 2014 who focused on borrowing for general purposes which include the Eurobond instead of borrowing focused on project which will have value in terms of accelerating revenue collection.
"What this means is that debt comes to Kenya without going to specific projects. How then will we pay that loan if it does not fund value adding projects or investments in public assets?" he posed.
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