IMF launches governance assessment to boost Kenya economic growth

The International Monetary Fund has launched a governance diagnostic assessment to identify corruption risks that could impede Kenya’s macroeconomic stability and growth.
Prime Cabinet Secretary and Cabinet Secretary for Foreign and Diaspora Affairs, Dr. Musalia Mudavadi, officially inaugurated the assessment, which is a crucial step toward tackling governance challenges in the country.
Speaking during the launch in Nairobi, Mudavadi expressed his appreciation for the IMF’s decision to respond to the Government’s request for the diagnostic assessment. He noted that the initiative would begin with a scoping mission, followed by a comprehensive evaluation later in the year.
“We welcome the IMF’s commitment to help Kenya address governance issues that may hinder our economic performance. The scoping mission is the first step in what will lead to a full assessment in June 2025,” Mudavadi stated.
“This assessment will provide insights into the corruption vulnerabilities affecting our fiscal governance, the Central Bank, and other critical areas.”
The assessment will specifically focus on corruption vulnerabilities across six core areas: fiscal governance, Central Bank operations, financial sector oversight, market regulation, the rule of law, and anti-money laundering measures.
According to Ms. Rebecca A. Sparkman, IMF’s Division Chief for Revenue Administration and Fiscal Affairs, the scoping mission will create a foundation for the more detailed examination later in the year.
“The findings from this technical assessment will enable the Government to implement priority governance reforms, supporting our economic growth agenda,” Mudavadi added. “Our goal is to ensure that governance issues do not hinder Kenya’s efforts to achieve a more sustainable and equitable economy.”
During his remarks, Mudavadi highlighted some of the challenges the government has been facing, particularly in dealing with corruption and conflicts of interest. He reaffirmed the Government’s unwavering commitment to promoting transparency and accountability in both public and private sectors.
“While we have made progress with various reforms, corruption remains a significant challenge. Our administration remains committed to addressing these issues head-on, but we need the support of international partners such as the IMF,” Mudavadi emphasized.
The chief Cs also acknowledged the budgetary constraints facing the Government following the withdrawal of the Finance Bill 2024, a decision made in response to widespread protests against proposed tax increases. These challenges, he noted, have made it more difficult to implement the reforms needed to drive economic transformation.
“We are aware of the constraints we face, particularly the challenges resulting from the Finance Bill’s withdrawal last year. However, we remain committed to working within our means to implement reforms that can help Kenya thrive,” he said.
Mudavadi called for a robust stakeholder engagement process that includes national and county governments, the judiciary, Parliament, the private sector, civil society, and faith-based organizations. He emphasized that involving these key stakeholders in the process will provide a comprehensive understanding of the challenges constraining economic growth and social transformation.
“The engagement of key stakeholders will be crucial for the success of this mission. We are operating in a highly politicized environment, and managing expectations will require careful and coordinated efforts,” Dr. Mudavadi noted.
The IMF has conducted similar governance diagnostic assessments in other countries. Since 2018, it has finalized reports for 20 countries, with 10 more in progress. Dr. Mudavadi requested that the IMF share its experiences and lessons from these countries, as they could provide valuable insights into Kenya’s governance challenges.
“I believe the experiences from other countries will help us shape our approach to governance reforms. We are keen to learn from the IMF’s work in other nations,” Dr. Mudavadi said.
The scoping mission is expected to lay the groundwork for a more detailed assessment scheduled for later in the year. The IMF team will work closely with Kenyan officials to analyze the country’s governance frameworks and identify areas requiring immediate attention.
Present at the meeting were Mr. Albert Mwenda, Director General for Budget, Fiscal and Economic Affairs at the National Treasury, and Mr. Selim Cakir, IMF’s Resident Representative in Kenya, along with other officials from both the IMF and the Government of Kenya.
The joint effort signals a promising collaboration to address governance challenges and create a more transparent and accountable system that can foster sustainable economic growth.
Prime Cabinet Secretary:Dr.Musalia Mudavadi