Mudavadi: We have engaged IMF to probe graft in government

Prime Cabinet Secretary Musalia Mudavadi when he appeared before the before the Senate Delegated Legislation Committee. [File, Standard]

The government has launched a fresh corruption audit across all ministries and departments to unlock stalled billions of shillings from the International Monetary Fund (IMF).

Prime Cabinet Secretary Musalia Mudavadi confirmed the launch of the probe on Monday, revealing that the government has formally engaged the IMF to conduct a comprehensive governance and corruption diagnosis.

"The government has formally engaged the International Monetary Fund to conduct a comprehensive governance and corruption diagnosis across all ministries and public institutions," Mudavadi said on his X handle.

"This initiative is part of the President William Ruto government’s unwavering resolve to eradicate graft and protect the economy and livelihoods of Kenyans."

The IMF recently confirmed that governance concerns are central to the delays in releasing funds to Kenya under its financial programme.

During a fact-finding mission, IMF staff assessed Kenya's situation and emphasised ongoing discussions about the path forward.

The IMF reiterated its commitment to assisting Kenya in identifying and implementing effective policy reforms. However, no new funding was announced following the Nairobi meetings mid last month.

The IMF consequently urged Kenyan authorities to initiate governance diagnostics to pinpoint areas for improvement.

"Promoting good governance is essential to our engagement with Kenyan authorities," said Julie Kozack, director of the communications department at the IMF.

These diagnostics aim to strengthen governance frameworks and lay the groundwork for effective actions by Kenyan authorities, IMF had indicated.

 An IMF delegation led by Haimanot Teferra concluded its visit to Nairobi on September 16, stressing the urgent need for new policies from the Ruto administration amid ongoing economic and fiscal challenges.

The IMF's insistence on new tax policies followed the rejection of the controversial Finance Bill 2024 that aimed to increase taxes to meet IMF conditions.

In response to the unrest, President Ruto appointed a new finance minister, John Mbadi, signaling a potential shift in fiscal strategy.

Mbadi will face the dual challenge of addressing public sentiment while aligning government policies with IMF expectations.

This situation presents a new test for Ruto, who has been under mounting pressure to fulfill economic promises amid rising discontent.

The lack of immediate financial assistance highlights the IMF's position that new policies and a fight against corruption are a prerequisite for any future funding.

Kenyans have expressed concerns about heavy borrowing, arguing it has yet to improve their lives. Meanwhile, protesters contend that citizens are paying higher taxes to service these loans.

The IMF maintains that its financial support has alleviated market concerns, facilitating Kenya's access to the bond market and aiding in the rollover of a maturing Eurobond.

Activists have continuously pressed the government to disclose the total amount of the country's current debt, particularly the debt owed to China, which officials have been reluctant to reveal.

In response, Ruto formed a task force to audit the country's debt, with a report expected by the end of September.