Kenya welcomes IMF decision

A recent parliamentary report suggests high level corruption

The government of Kenya has welcomed the decision by the International Monetary Fund, IMF, to resume loans to the country after a three-year suspension.

Finance Minister Chris Okemo said the funds will help ease a severe economic crisis facing Kenya.

The IMF said the decision had been taken because Kenya had made progress in battling corruption.

An IMF spokeswoman said the first installment of a $200m loan, of about $18m, would be available immediately. A further $40 would be made available in the current financial year.

The IMF and the World Bank suspended loans to Kenya in August 1997 demanding the government tackle widespread corruption and speed up the privatisation of state corporations.

List of shame

Last July, President Moi appointed renowned paleontologist Richard Leakey, a third-generation white Kenyan, to clean-up the civil service and steer the country's economic recovery.

A long-time friend of World Bank president James Wolfensohn, Mr Leakey's appointment is viewed by many as the main reason why Kenya is now back in favour with the IMF.

The IMF decision is expected to clear the way for other international lenders to resume their aid programmes with Kenya.

But last week, Kenya's war against corruption was plunged into serious doubt after the Government won a battle to have a list of senior government officials implicated in financial scandals expunged from a parliamentary report.

Richard Leakey: Heading Kenya's recovery team

The report dubbed 'the list of shame' named key figures in President Moi's government including his own son, Phillip, Vice-President Professor George Saitoti and influential minister Nicholas Biwott.

The Kenya shilling has risen slightly against the dollar in recent weeks on hopes of a loan resumption.

Economic crisis

Observers say Kenya is suffering its worst economic crisis since independence in 1963.

The crisis has been worsened by a severed drought which forced President Moi to make a personal appeal for international help to save three million Kenyas who were absolutely destitute.

News of the resumption of IMF co-operation is likely to anger opponents of the Kenyan Government who set up a lobby group to campaign against the release of loans to the country.

The group, known as the Stakeholders Support Group, brought together opposition MPs, the Law Society of Kenya and representatives of civil societies.

The group challenged the IMF to show how Kenya has complied with the conditions which were placed on the resumption of loans.