NAIROBI - The International Monetary Fund’s restrictive ideologies are partly to blame for the regional poor economic performance over the years, a new report has said.
Since the 1970s the financier as the global central bank has engaged Kenya in various programmes aimed at helping it manage economic crises mostly under structural adjustment loans
But most of the policies though advanced as a panacea to the country’s problems, had direct opposite long-term effects on the economy.
The policies restricted government spending and were aimed at getting the country back to normalcy instead of scaling up spending especially on social subsidies, which would have had better impact by expanding production.
The report by the Centre for Economic Governance and Aids in Africa released on Tuesday, is a review of the impact the international financier’s policies have had on Kenya’s economy, especially on health issues.
“These restrictive fiscal and monetary policy targets and the adoption of market-determined interest rates have greatly constrained the ability of the government to engage in more expansionary development projects to meet Millennium Development Goals,” the centre’s advocacy officer Rose Wanjiru, said.
The macroeconomic policies laid out in Kenya’s recent IMF programme, the Poverty Reduction and Growth Facility (PRGF), are seen as restricting government spending on health and education.
The PRGF ended in January and in May, Kenya signed a new $209 million loan deal through the IMF’s exogenous shocks facility to help plug budget holes caused by declining revenues and previous increases in cost food, fuel and fertiliser.