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Last Updated: Monday, 24 November, 2003, 15:33 GMT
Kenya calls for more reform aid
Kenyan President Mwai Kibaki
The IMF is rewarding President Mwai Kibaki's anti-corruption efforts
Kenyan President Mwai Kibaki has warned that economic reforms may not yield lasting results, unless donors provide more financial assistance.

Mr Kibaki was speaking after the International Monetary Fund (IMF) resumed aid after a three-year gap.

The IMF's $250m (147m) loan is seen as a reward for efforts to tackle Kenya's endemic corruption.

Makhtar Diop, the World Bank representative in Kenya, said the country should accelerate reforms.

"Kenya's potential has been suppressed by an inefficient and poorly enforced legal structure and by a high cost of doing business," Mr Diop said.

"This has to change."

Promises, promises

Kenya has been outside the international financial fold since 2001, when lenders and donors became concerned about widespread corruption under the government of Daniel arap Moi.

Last year, Mr Kibaki's National Rainbow Coalition was swept to power, on the explicit promise of cleaning up the Kenyan economy.

Mr Kibaki told a conference of donors and investors that they should follow up the IMF loan with money of their own.

His government is particularly concerned about the scale of spending cuts that will be necessary under current fiscal conditions.

Opposition groups are already protesting about some 45,000 planned redundancies in the public sector, arguing that Mr Kibaki is more interested in listening to investors than heeding the plight of the poor.

Currency boost

Kenya's stock market, meanwhile, hit a four-year high on news of the IMF agreement.

The deal, it was thought, would bring in private-sector credits and reduce government borrowing on the open market.

That is likely to reduce the return on government debt, making shares look a more attractive investment.

The Kenyan shilling also rose early in the day on the back of the IMF announcement.




WATCH AND LISTEN
BBC World Service business reporter Matthew Davies
"The government appears to listen more to investors than to the concerns of the poor."



SEE ALSO:
World Bank pledges Kenya aid
23 Jul 03  |  Business
Rising hope for aid to Kenya
10 Jul 03  |  Business
Kenya targets corrupt officials
17 Apr 03  |  Business


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