2011年-IMF国际货币组织全球_Kenya_Request_for_a_Three_86页_1mb

Summary of Kenya's Request for a Three-Year Arrangement Under the Extended Credit Facility

Core Content

The document outlines Kenya's request for a three-year arrangement under the Extended Credit Facility (ECF) of the IMF, aimed at enhancing international reserves and implementing a gradual fiscal adjustment. The program is designed to support macroeconomic stability and sustainable growth, while addressing governance and institutional reforms as part of the new constitution's implementation.

Main Objectives

• Protect the external position while allowing a gradual fiscal adjustment.
• Boost international reserves to reduce vulnerability to external shocks.
• Implement fiscal decentralization in line with the new constitution.
• Strengthen public financial management (PFM) and reduce the scope for corruption.
• Maintain low inflation and a floating exchange rate regime.
• Reduce the debt-to-GDP ratio to below 45 percent by the end of the program period.

Key Issues

A. Build Up International Reserves

• Kenya's international reserves are low relative to regional and global peers.
• The external current account deficit is expected to widen due to increased import demand and terms-of-trade deterioration.
• The Fund's 2009 Exogenous Shocks Facility (ESF) and SDR allocation helped boost reserves to 3.5 months of imports by end-2009.
• A larger reserve buffer is needed to withstand potential external shocks.

B. Need for Gradual Fiscal Consolidation

• The recent rise in the debt-to-GDP ratio threatens fiscal sustainability.
• Fiscal adjustment must be gradual to ensure priority spending (e.g., infrastructure and constitution implementation) is maintained.
• The new constitution requires significant fiscal investment, including geothermal power generation to reduce dependence on oil and hydropower.

C. Constitutional Reforms and Governance

• The new constitution provides a framework for major governance reforms, including fiscal decentralization and land ownership reform.
• It strengthens the judiciary and establishes an Integrity and Anti-Corruption Committee.
• The constitution is expected to lead to a faster devolution of resources to regions.

Economic Program (2011–13)

Fiscal Policy

• The program targets a reduction in the central government primary deficit from 3.8 percent of GDP in 2010/11 to 1.2 percent in 2013/14.
• Tax reform will broaden the tax base and improve compliance, including a modern VAT law and the establishment of a Tax Reform Commission (TRC).
• Strict control of current spending will be implemented to ensure fiscal discipline.

Monetary and Financial Policies

• The program aims to maintain low inflation and a floating exchange rate regime.
• Monetary policy will support the gradual fiscal adjustment and ensure financial stability.
• Financial sector reforms include modernizing tax administration and improving financial intermediation.

Program Modalities

• Access: SDR 325.7 million (120 percent of quota).
• Initial Disbursement: SDR 65.1 million upon approval.
• Term and Phasing: 36 months, with reviews scheduled for July 15, 2011, and October 15, 2011, followed by semiannual reviews.
• Conditionality: Focuses on reserves build-up, fiscal balance improvement, PFM reform, tax reform, and financial system strengthening.
• Safeguards Assessment: Will be updated at the first review.

Risks and Considerations

• The program must balance fiscal discipline with investment needs.
• Climate change poses significant risks to Kenya's economy, particularly through droughts and floods, requiring adaptation measures.
• Private investment is expected to grow in the medium term, supporting growth rates close to 7 percent annually.

Supporting Policies and Data

• The program is aligned with Kenya's Poverty Reduction Strategy Paper (PRSP).
• Selected Economic Indicators show a recovery in GDP growth and a decline in inflation.
• Debt sustainability analysis (DSA) indicates the need for a gradual reduction in the debt burden.
• Public debt is projected to decrease from 45.7 percent of GDP in 2010/11 to 43.6 percent in 2013/14.

Conclusion

The three-year ECF arrangement is a critical step in supporting Kenya's economic recovery and long-term stability. It aims to address structural and institutional challenges, improve governance, and ensure sustainable fiscal and monetary policies in the context of a growing economy and increasing external risks.