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IMF Expects to Resume Funding for Kenya - 2003-01-17

The head of the International Monetary Fund in Africa says he expects to resume funding for Kenya by mid-year. The new Kenyan government is set to push through crucial anti-corruption legislation to meet IMF demands.

The director of the IMF's Africa department, Abdoulaye Bio-Tchane, says he believes Kenya has an excellent chance of qualifying for loans again.

Mr. Bio-Tchane says extensive discussions with newly-elected government leaders in Nairobi this past week convinced him that they are ready to take concrete steps to get rid of corruption.

"After meeting with the ministry of justice and the ministry of finance, I have come to the conclusion that these people have a clear understanding of where they are going," he said. "And I think we need to encourage them. We need to support them and make sure that these actions are really implemented."

What the IMF wants first and foremost is the passage of anti-corruption legislation that the previous government of Daniel arap Moi failed to implement. Fed up with Mr. Moi's inaction, the IMF suspended loans in late 2000, prompting other donors to withdraw their support as well.

Kenya is now one of the poorest countries in the world, with more than half the population living on less than one dollar a day.

The new government of Mwai Kibaki, which took power after a landslide victory in December 27 elections, has promised to fight graft and rebuild ties with lenders and donors.

President Kibaki says the government is already prepared to reintroduce stalled legislation to create an anti-corruption authority and a law defining economic crimes. They will be submitted when Parliament reconvenes on January 28.

He has also ordered public officials to declare their wealth, and he has created a new department to oversee the campaign to clean up government corruption.

On Friday, Kenya's finance minister announced that there will be a payment freeze on all government contracts while the ministry reviews its spending priorities. The government wants to ensure none of the payments involve bribes or fraudulent claims.

The IMF says it may review Kenya's progress as early as April. If the anti-corruption legislation is in place and working, officials say a new lending program could begin in July.