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Friday, 30 March, 2001, 18:03 GMT 19:03 UK
IMF ultimatum to Kenya
Richard Leakey
Anti-corruption official Richard Leakey left his post this week
By East Africa correspondent Cathy Jenkins

The International Monetary Fund says it will resume lending to Kenya only when the government has completed promised reforms on privatisation and good governance.

An IMF team has just spent two weeks in the country holding high-level meetings with Kenyan President Daniel arap Moi, and government officials.

The IMF and other donors suspended loans because of concern over corruption and lack of transparency.

An IMF statement said it hoped that sufficient progress would be made so that discussions on the resumption of lending could be completed by mid-May.

Progress

They said that Kenya had made encouraging progress in fighting corruption but more was still needed to be done.

President Moi
President Moi: Presidential election due next year
At stake are loans worth more than $200m - money which the fragile Kenyan economy could badly do with.

But the IMF says the loans won't be released until the government has completed promised reforms.

These include the passing of two parliamentary bills designed to crack down on corruption and much more work in the area of privatisation, especially the speeding up of efforts to privatise the state-owned telephone company.

The IMF has also demanded the re-establishment of an independent anti-corruption agency.

Problems

The Kenya Anti-Corruption Authority did have powers of prosecution but the High Court declared it unconstitutional last December amid speculation that the agency was treading on too many important toes in its quest to root out graft.

The IMF statement came at the end of a week which saw the resignation of Richard Leakey as head of the civil service.

His appointment by President Moi in 1999 was seen as a sign that Kenya was serious about eradicating corruption and improving transparency.

Three top civil servants who were closely linked to Dr Leakey and who were known as the dream team in the fight against corruption were dismissed.

President Moi said that Dr Leakey had initiated the reform process and that work would continue.

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See also:

23 Jul 99 | Africa
Leakey gets top Kenyan post
27 Jun 00 | Africa
Kenya civil servants face axe
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