Press Release: Managing Director's Visit to Kenya

July 9, 2003

The following statement to the press was made by Horst Köhler, Managing Director of the IMF in Nairobi, on July 8, 2003.

"It is with great pleasure that I accepted the kind invitation of President Mwai Kibaki to visit Kenya. This is my third visit to the country as Managing Director of the IMF and is a sign of the Fund's strong support for Kenya's development efforts. I had fruitful discussions with President Kibaki, Finance Minister David Mwiraria and his economic team, and also with the leader of the opposition, Hon. Uhuru Kenyatta. These talks helped to deepen my understanding of the current economic and social challenges facing Kenya.

"These challenges are formidable, and the Government has begun to tackle them in a decisive manner, in the context of a broad-based consultative process. In addition, a very close working relationship has developed between the Fund and the Kenyan Government. It is in the interest of all Kenyans, and the international community, that Kenya achieves strong economic and employment growth and poverty reduction. This calls for the effective exploitation of its potential including the opportunities through integration into the global economy. Sustained implementation of bold economic reforms is needed to strengthen the competitiveness of the economy.

"In my discussions with President Kibaki, I expressed the Fund's strong support for the way the Government is approaching many of the problems. There is broad agreement that fiscal prudence is needed to reduce the domestic debt burden. I welcomed the fact that, despite the severe budgetary constraints, government spending has begun to be restructured in favor of crucial social and economic sectors, including education and health.

"I also congratulated President Kibaki for the strong measures the Government is taking in addressing corruption. A sustained effort to fight corruption is an important pillar to improve the investment climate for the private sector. A thriving private sector and its investments are essential for job creation. Continued reforms, particularly of financial institutions and trade, will help foster growth and reduce poverty.

"As you know, we have been discussing with the Government Fund financial support for Kenya's development strategy as laid out in the Economic Recovery Strategy for Wealth Creation and Employment. I expect the staff to conclude these discussions in the near future.

"Thus, I come away impressed with the Government's efforts in tackling the difficult challenges facing the country. For our part, we will remain committed to assist Kenya in creating the conditions for sustained and equitable growth and poverty reduction."


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