Kenya’s Money in the Past: EIU Prospects for 1990

Found this interesting booklet from the 1980’s. It’s out of print but glancing at some pages, it has some  interesting perspective in terms of things to come  (excerpts in italics):

  • EIU CoverGovernment Used to Love the World Bank and Hate the International Monetary Fund: (but) one result of the struggle with stabilization and structural adjustment has been a reversal of the government relations with the bank and the fund..Kenyan officials contemplate an application to the fund with reluctance, they regard negotiations as unnecessary taxing, tie up lots of top officials and are short-term in gains. Relations with the World Bank were preferred but now things are changing;  (in 1983) the World Bank announced it was withholding the second tranche of its structural adjustment loan pending fulfillment of conditions attached to the loan. At the same time the IMF singled out Kenya as an example of an economy where effective adjustment policies had brought down inflation and promoted economic growth, and an IMF Survey reported that Kenya’s efforts to reduce domestic and external imbalances (pzrticlulary under the current economic adjustment program), have met with considerable success.

    EIU SAP

    Some Kenya Structural Adjustment Programs (SAP’s)

  • Top Technocrats speak the same language as the IMF: While relations with the World Bank are strained, those with the IMF have blossomed. New appointments have helped this including George Saitoti who replaced the unhappy Arthur Magugu as Finance Minister in 1983 and he called for larger IMF loans, moderation in import legislation and exchange rate flexibility. So does the governor the central bank, Phillip Ndegwa, whose recent collection of papers includes one on the virtues of exchange rate fluctuation.   
  • The tourism plans were considered ambitious: The target for 1988 was 724,000 tourists for 1988 (35% above the 1985 figure).
  • Oil Price Trends are in Kenya’s Favour
  • Annual growth rate  (target) for 1970 to 1983 was reduced from 6.3 to 5.4% since population growth was estimated (since the 1979 census) at 3.9%, not 3.5%
  • Fiscal & Monetary Reforms Proposed: Attempts to tighten control of government expenditure and reduce tax evasion would be accompanied by attempts to shift deficit financing from the CBK to commercial banks. There would also be upward adjustment of interest rates to stimulate increased savings..