2012年-IMF国际货币组织全球_Kenya_Third_Review_Under_the_Three_47页_1mb

Summary of Kenya's Third Review Under the Three-Year Arrangement Under the Extended Credit Facility and Request for Modification of Performance Criteria

Core Content

This document outlines the third review of Kenya's three-year Extended Credit Facility (ECF) arrangement under the IMF's Extended Credit Facility (ECF), approved in January 2011 and augmented in December 2011. The review took place in early 2012 and included a request for modifications to performance criteria and indicative targets for the next 12 months. The staff report and press release reflect the IMF's assessment of Kenya's economic performance and policy implementation up to the end of 2011, as well as projections and risks for the coming years.

Main Views and Key Information

1. Economic Outlook and Program Implementation

• Economic Growth: Growth slowed in FY 2011/12 but is expected to remain above 5% due to strong domestic activity and improved conditions in the Northern part of the country.
• Inflation: Inflation declined from 20% in November 2011 to 16.6% in February 2012, with both headline and core inflation in single digits by December 2011. It is projected to fall further to 10–12% by June 2012.
• Current Account Deficit: The drought and high international commodity prices widened the current account deficit to almost 11% of GDP in FY 2011/12. However, the outlook for FY 2012/13 is more positive due to the unwinding of one-off factors.
• Fiscal Policy: The primary fiscal balance met the December 2011 target, and fiscal consolidation is progressing. The program includes measures to reduce the government debt-to-GDP ratio and improve public financial management.
• Monetary Policy: Tight monetary policy has helped curb inflation and credit growth. The Central Bank of Kenya (CBK) aims to maintain the policy interest rate at 18% until inflationary expectations stabilize.

2. Program Modifications

• The staff recommends modifying all performance criteria and indicative targets for the next 12 months.
• Disbursement of SDR 71.921 million is approved, contingent on meeting the revised targets.
• The new targets take into account the revised balance of payments outlook and include adjustments for foreign exchange inflows from the US$600 million syndicated loan and new sovereign bond issuance.

3. Key Reforms and Legislative Progress

• The Public Finance Management (PFM) bill has been submitted to the National Assembly and is expected to be approved by the end of FY 2011/12.
• The VAT reform bill has been approved by the Cabinet and is under review by the Attorney General Office for submission to the National Assembly.
• Pension reform and salary rationalization are progressing, with the pension reform bill targeting the phasing out of the non-contributory pension system.
• The Treasury Single Account (TSA) and re-engineered IFMIS are expected to improve transparency and efficiency in public financial management.

4. Policy Discussions and Risks

• Global Economic Downturn: Kenya remains vulnerable to a global slowdown, particularly due to its reliance on non-traditional exports, tourism, and remittances. A further decline in external demand could worsen the current account and inflation.
• Fiscal Consolidation: The authorities plan to maintain the primary fiscal balance targets despite revenue shortfalls. Additional savings on non-priority expenditures will offset the impact of postponed excise tax reinstatement.
• Monetary Policy Challenges: The CBK faces the challenge of managing liquidity and maintaining inflation control. It is preparing to resume domestic security issuance as inflation declines.
• Financial Risks: Banks are generally sound, but there are concerns about credit risk, liquidity risk, and spillovers from Europe. The CBK is monitoring banks closely and has intensified oversight of those with higher exposure to interest-sensitive sectors.
• Political and Institutional Risks: The political climate is expected to remain stable, but the approaching 2013 elections and the implementation of fiscal decentralization could affect political support for the program.

Key Figures and Tables

• Growth and Inflation: Figure 1 shows the trend of growth and inflation, with inflation beginning to abate and growth expected to remain stable.
• Balance of Payments: Figure 2 illustrates the impact of the drought and commodity prices on the current account deficit.
• Fiscal Developments: Figure 3 highlights the fiscal balance, revenues, and expenditures, showing a shift toward fiscal consolidation.
• Financial Developments: Figure 4 and 5 show the dynamics of money market rates, yield curve, and liquidity conditions.

Conclusion

The staff report concludes that the review should be completed and disbursements approved, provided that the revised performance criteria and targets are met. The program remains on track, with fiscal consolidation and monetary policy adjustments helping to stabilize the economy. However, external and political risks continue to pose challenges, requiring continued monitoring and contingency planning. The new constitution and fiscal decentralization are central to the reform agenda, with PFM and VAT reforms expected to be finalized and implemented in the coming fiscal year.

Attachments

• Letter of Intent: Sent by the Kenyan authorities to the IMF.
• Technical Memorandum of Understanding (TMU): Updated version included in the staff report.

Staff Appraisal

The staff team, led by Fanizza (AFR) and including Morales, Milkov, and Raei (AFR), as well as Bouza (SPR), visited Kenya from February 29 to March 12, 2012. The review was conducted in the context of a tight monetary policy, fiscal consolidation, and ongoing reforms. The Executive Board approved the disbursement and modified performance criteria in line with the updated economic outlook.