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EDITIONS
 Friday, 3 January, 2003, 17:02 GMT
Challenges for Kenya's finance chief
Daniel arap Moi and Mwai Kibaki
Handover of power: From Moi (l) to Kibaki
Kenya's newly appointed finance minister has promised to restore relations with international money lenders.

Kenya's new president Mwai Kibaki has already made the rebuilding of the struggling economy a priority.

The donors are looking for someone different from those that have been tainted in the past

Noah Meely, Citibank Nairobi
And he has given the key post of finance minister to David Mwiraria, a man who used to be a member of the previous ruling party Kanu.

"We have to regularise our relations with donors by putting in place the laws required for good governance," Mr Mwiraria said following his appointment on Friday.

Uphill battle

For a decade, Kenya's economic performance has been well below its potential, according to a recent assessment by the International Monetary Fund (IMF).

Economic growth has failed to keep up with the rising population, so production per person has been declining since 1998.

Kenya is very poor and is an obvious candidate for the IMF's poverty reduction assistance.

But the IMF stopped lending to Kenya two years ago, mainly because of what it calls pervasive governance problems - in other words widespread corruption.

Reforming zeal

The new government knows that it has to tackle the problem if the IMF is to resume financial assistance.

The IMF also says reforms are necessary in order to generate stronger economic growth.

President Kibaki has already said he will quickly announce reform plans for state owned organisations such as the Ports Authority, Telkom Kenya and the Social Security Fund, which are widely seen to have been used as sources of corrupt funds in the past.

Kenya's aid donors want him and his new finance minister to push ahead with credible reforms that are implemented throughout the public sector.

'A solid fellow'

Mr Mwiraria is a close friend of Mr Kibaki, and studied statistics at Makerere University in Uganda.

He has also previously worked as a consultant for the World Bank and headed the common market department for the regional East Africa community.

He served as a permanent secretary for home affairs in the government for 10 years, and has been shadow finance minister for the past 5 years.

Analysts welcomed his appointment.

"He is a sound fellow, very solid, very steady," said Robert Shaw of the Institute of Economic Affairs.

"He should be up to the task... the donors are looking for someone different from those that have been tainted in the past," said Noah Meely of Citibank in Nairobi.

  WATCH/LISTEN
  ON THIS STORY
  The BBC's Ishbel Matheson
"Things have really gone downhill for the Kenyan economy."
Kenyans choose a new president

Key stories

Inauguration day

Moi steps down

Background

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See also:

03 Jan 03 | Africa
03 Jan 03 | Africa
30 Dec 02 | Africa
17 Dec 02 | Africa
13 Dec 02 | Media reports
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