News / Africa

IMF Director Lagarde Warns of Looming Shocks in Kenya

IMF's Christine Lagarde addressed Kenya's economic issues at the nation's parliament. (IMF photo by Stephen Jaffe)
IMF's Christine Lagarde addressed Kenya's economic issues at the nation's parliament. (IMF photo by Stephen Jaffe)
Reuben Kyama
The International Monetary Fund's Christine Lagarde this week urged Kenya to decentralize management and fiscal powers to address large infrastructure gaps and take the lead in regional economic integration.

As the managing director of the the International Monetary Fund (IMF), Lagarde spoke to a group of investors, diplomats and civil society organizations at several venues including Kenya's parliament in Nairobi.

Lagarde said Kenya stands a good chance to lift the region economically if it goes ahead with its reform agenda.

She commended the country’s ambitions, but warned about pitfalls in the coming years.

She said this East African nation of 40 million-plus people is vulnerable to global economic forces – particularly a slowdown in emerging markets, which once bolstered the region’s growth.

Remarkable economic gains praised

“Indeed, Kenya’s economic gains over the past few years have been nothing short of remarkable,” said Lagarde. “Coming on the heels of a delicate political transition, growth remains robus – at more than 5 percent in 2013.

“And a set of bold economic reforms have laid the foundations to lift the economy to middle-income status within the next decade – if Kenya maintains the reform momentum.”
 
The IMF has predicted that sub-Saharan Africa will grow at a rate of nearly 6 percent in 2014. Kenya grew by 5 percent in 2013.  

The IMF chief, who was on a three-day official visit to Kenya this week, underlined the Bretton Wood institution’s commitment to East Africa’s  leading economy.
 
We have been by Kenya’s side through the many challenges you have faced” said the IMF chief. “We were here during the 2009 global downturn, during the 2011 drought, and we stood with you during the Westgate attack…

“We have provided financial support through our Extended Credit Facility to deal with adverse shocks – and I am very happy that our executive board gave its seal of approval for the successful completion of the program just a few weeks ago.

Lagarde notes constant support

“We have also worked with the Kenyan government as it designed and implemented reforms, and we supported that agenda with financing, advice, and stepped-up technical assistance.

“What I am saying is that the IMF has been Kenya’s partner – through thick and thin.”
 
While in Kenya, Lagarde met with Kenyan President Uhuru Kenyatta, treasury officials, women leaders and representatives from the business community.

Kenyan officials are seeking an emergency loan from the Washington-based lenders to use it as a fall back to looming economic shocks. They say the loan, which the IMF is to disburse as a lender of last resort, will be priced on commercial terms – signalling its possible impact on Kenya’s external debt burden.

But the IMF boss advised Kenyan officials to promote fiscal discipline and encourage foreign investment in order to maintain the country’s high economic growth rate, and contribute to sub-Saharan development.

Giving Kenya the credit

“But let me be clear on this point: Kenya’s achievements are Kenya’s. Your country has had full ownership of the reform agenda. You have implemented it. You have garnered domestic support for it. And that is why it was a success.

“Now is a good time to commend Kenya on its performance. But this is not the time for complacency.

“Yes, Kenya’s future holds great promise. Looking ahead, achievements need to be deepened and broadened, so the economy can be made even more resilient, and the benefits of growth can be even more widely shared among all the Kenyan people.”

The decision by Kenya’s treasury officials to turn to the precautionary lending arrangement is one of the measures the Kenyatta government is taking to prevent a recurrence of the shocks that hit the economy in 2011 after the Central Bank of Kenya failed to adequately respond to the combination of internal and external shocks.

You May Like

Hostage Crisis Could Divide Japan Over Plans to Boost Military

Japanese Chief Cabinet Secretary Yoshihide Suga said Monday the government is working closely with the Jordanian government to secure the release of remaining Japanese hostage Kenji Goto More

Video Brussels Shaken as New Greek Leader Challenges Europe’s Austerity Drive

Country's youngest ever PM Alexis Tsipras, 40, sworn in Monday and says he will restore dignity to Greece by ending spending cuts More

Multimedia National Geographic Photo Camps Empower Youth

Annual mentoring program's mission is to give young people a voice to tell their own stories through photography More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Obama Urges Closer Economic Ties During Historic India Visiti
X
Aru Pande
January 26, 2015 9:33 PM
U.S. President Barack Obama says the United States and India must do better to capitalize on untapped potential in their economic relationship - by removing some of the roadblocks to greater trade and investment. As VOA correspondent Aru Pande reports from New Delhi, Obama spoke after participating in India’s Republic Day celebration.
Video

Video Obama Urges Closer Economic Ties During Historic India Visit

U.S. President Barack Obama says the United States and India must do better to capitalize on untapped potential in their economic relationship - by removing some of the roadblocks to greater trade and investment. As VOA correspondent Aru Pande reports from New Delhi, Obama spoke after participating in India’s Republic Day celebration.
Video

Video US, EU Threaten New Russia Sanctions Over Ukraine

U.S. President Barack Obama has blamed Russia for an attack by Ukrainian separatists that left dozens dead in the port of Mariupol and cast further doubt on the viability of last year’s cease-fire with the Kyiv government. VOA’s Michael Bowman reports from Washington.
Video

Video White House Grapples With Yemen Counterterrorism Strategy

Reports say the U.S. has carried out a drone strike on suspected militants in Yemen, the first after President Barack Obama offered reassurances the U.S. is continuing its counterterrorism operations in the country. The future of those operations has been in question following the collapse last week of Yemen’s government. VOA White House correspondent Luis Ramirez reports.
Video

Video Kerry Warns Against Violence in Nigeria Election

US Secretary of State John Kerry visited Nigeria Sunday in a show of the level of concern within the U.S. and the international community over next month’s presidential election. Chris Stein reports.
Video

Video Zoo Animals Show Their Artistic Sides

The pursuit of happiness is so important, America's founding fathers put it in the Declaration of Independence. Any zookeeper will tell you animals need enrichment, just like humans do. So painting, and even music, are part of the Smithsonian National Zoo's program to keep the animals happy. VOA’s June Soh met some animal artists at the zoo in Washington. Faith Lapidus narrates.
Video

Video Worldwide Photo Workshops Empower Youth

Last September, 20 young adults from South Sudan took part in a National Geographic Photo Camp. They are among hundreds of students from around the world who have learned how to use a camera to tell the stories of the people in their communities through the powerful medium of photography. Three camp participants talked about their experiences recently on a visit to Washington. VOA’s Julie Taboh reports.
Video

Video Saudi, Yemen Developments Are Sudden Complications for Obama

The death of Saudi Arabia's King Abdullah and the collapse of Yemen’s government have cast further uncertainty on U.S. efforts to fight militants in the Middle East and also contain Iran’s influence in the region. VOA White House correspondent Luis Ramirez reports on the new complications facing the Obama administration and its Middle East policy.
Video

Video Progress, Some Areas of Disagreement in Cuba Talks

U.S. and Cuban officials are reporting progress from initial talks in Havana on re-establishing diplomatic ties. U.S. Assistant Secretary of State (for Western Hemisphere Affairs) Roberta Jacobson said while there was agreement on a broad range of issues, there also are some “profound disagreements” between Washington and Havana. VOA State Department correspondent Pam Dockins has the story.
Video

Video US, Japan Offer Lessons as Eurozone Launches Huge Stimulus

The Euro currency has fallen sharply after the European Central Bank announced a bigger-than-expected $67 billion-a-month quantitative easing program Thursday - commonly seen as a form of printing new money. Henry Ridgwell reports for VOA from London on whether the move might rescue the eurozone economy -- and what lessons have been learned from similar programs around the world.
Video

Video Nigerian Elections Pose Concern of Potential Conflict in 'Middle Belt'

Nigeria’s north-central state of Kaduna has long been the site of fighting between Muslims and Christians as well as between people of different ethnic groups. As the February elections approach, community and religious leaders are making plans they hope will keep the streets calm after results are announced. Chris Stein reports from the state capital, Kaduna.
Video

Video As Viewership Drops, Obama Puts His Message on YouTube

Ratings reports show President Obama’s State of the Union address this week drew the lowest number of viewers for this annual speech in 15 years. White House officials anticipated this, and the president has decided to take a non-traditional approach to getting his message out. VOA White House correspondent Luis Ramirez reports.
Video

Video S. Korean Businesses Want to End Trade Restrictions With North

Business leaders in South Korea are calling for President Park Geun-hye to ease trade restrictions with North Korea that were put in place in 2010 after the sinking of a South Korean warship.Pro-business groups argue that expanding trade and investment is not only good for business, it is also good for long-term regional peace and security. VOA’s Brian Padden reports.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid