IMF Loan Demands: Thousands of civil servants in Kenya will lose their jobs after Christmas. This as the government moves to implement structural reforms in order to get loans from the IMF and the World Bank. According to National Treasury Cabinet Secretary Ukur Yatani, the government is planning to merge or dissolve hundreds of State corporations, a move that will see thousands of civil servants go home.
This restructuring will start after Christmas and is one of the key conditions of the deal that Kenya has struck with the IMF for release loans.
All teachers, police, civil servants to take salary cuts
“The deal between Kenya and the IMF brings with it echoes of the 1990s-style structural adjustment programmes (SAPs) that saw civil servants sent home as a condition of Kenya receiving aid from the World Bank and IMF,” a report that appeared in the Standard newspaper on Wednesday said. The report added that besides restructuring State entities, Kenya is also supposed to mobilize more taxes as part of the condition with the IMF.
Yatani agreed and said that some of the State corporations will be merged, some will be dissolved and some will partner. “We are going to work on structural reforms … heavily,” he said.
In its Consolidated National Government Investment Report for the 2019-20 financial year, the National Treasury blamed Covid-19 for the losses that were recorded by some parastatals that will be affected in the restructuring. The overall profitability of commercial State corporations dropped by 91 per cent to Sh. 5.1 billion. Kenya Railways Corporation (KRC) led these parastatals in making losses. Its annual losses almost tripled from Sh. 8.47 billion in the previous financial year to Sh. 24.2 billion. “The big drop was mainly attributed to Kenya Railways Corporation,” Yatani said.
In defense of the government, though, Yatani said that the tough conclusion to fire workers and terminate multiple parastatals had been made because many State enterprises had become a burden on the Exchequer. IMF Loan Demands.