Seeing a lot of debate re IMF & whether under Kibaki IMF was also in town. Yes, under Kibaki, we had an IMF program. But the program had negligible budget support link & its terms were negotiated by a seasoned team at the Treasury led by Joseph Kinyua (captain, leader, legend)
Kibaki also loathed the idea of budget financing through World Bank & Donors. The error made by the current admin & for the current program was to link Eurobond issuance with IMF standby facility. That was a big mistake.
The @StandardKenya article is in principle correct about dangers of IMF facility non-renewal & impact on our debt situation but is too alarming on the Eurobond effect. Pricing will definitely change but no immediate meltdown as suggested.
The story should be Kenya will be forced to re-negotiate IMF program albeit on onerous terms. A SAP with budget support is imminent. No more Eurobond issues except for refinancing. End of freebies on social programs & breaks on Chinese loans. Something like that!
One thing is for sure though. We have serious debt issues to address. Those who have buried their heads under the sand now have it up & the IMF and the World Bank are extremely excited by the emerging crisis.
