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Last Updated:  Tuesday, 11 March, 2003, 08:12 GMT
Kenya needs $800m of aid
Crowds watch new president sworn in
Thousands watched Mwai Kibaki become president
Kenya's Finance Minister David Mwiraria has said he needs more than $800m of aid to fund this year's budget after state coffers were left almost bankrupt by the former government of Daniel Arap Moi.

The National Rainbow Coalition, led by Mwai Kibaki, swept into power in elections at the end of last year promising to change the way Kenya is run.

The new government has promised to re-build the country's infrastructure, improve delivery of services such as telecommunications and electricity, and tackle the high levels of unemployment.

"We have inherited almost a bankrupt treasury," Mr Mwiraria said, and that was after being assured by the previous administration that the deficit would only be $400m.

"It turns out, after looking at the figures, that deficit is going to be in the order of $850m," he told the BBC's World Business Report.

Double deficit

The ministry had hoped to finance projects by raising money domestically, but that is proving to be an impossible task.

"So one of our first jobs is to try and normalise relations with our development partners so that they can release the funds which were being withheld because of poor governance," he said.

Aid from the international community is only for the short-term however.

Mr Mwiraria said the money that Kenya has must be put to good use.

Good value?

"We want to give the Kenyan taxpayer value for his money - in the past there has been a lot of wastage," he said.

Citing road building as an example, the minister said it cost far more in Kenya than in neighbouring countries because of the amount of corruption from officials.

He also explained the government must try to seal loopholes in revenue collection.

"My estimation is that we will need a year and a half, maybe two years, before we get rid of the existing budget deficit," he said.

Awkward position

He acknowledges that the position of finance minister carries the risk of offending colleagues because he will sometimes have to tell them there is no money for their departments.

"I have no choice - I have to share the cake according to the priorities the cabinet sets," he said.

"We have several commitments - social services come first," he said, specifying free primary education and the provision of drugs to hospitals.

The government targets are an annual growth of 6% and the creation of 500,000 jobs.

"We have to set high targets because we believe we are high achievers and I'm sure the Kenyan people will understand if we fall short - as long as we have tried."

David Mwiraria, Kenya finance minister
"We have inherited an almost bankrupt treasury."

Kenya counts on new aid
13 Feb 03 |  Business
Kenya wins World Bank favour
11 Feb 03 |  Business

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