IMF Supportive of Health and Education in KenyaLetter sent to The Nation, in Nairobi, Kenya
December 13, 2007
Kevin J. Kelley's article on the International Monetary Fund and spending on health and education in Kenya ("Allow More Spending on Health, IMF Told", Dec. 10) is misleading and warrants some clarification
The IMF has provided support for Kenya's economic reform program through an arrangement under the Poverty Reduction and Growth Facility that was approved in November 2003. The IMF has fully supported the government's policy of increasing spending on priority areas (See IMF Press Release No. 07/66, IMF Executive Board Completes Second Review Under the PRGF, at www.imf.org).
In the early years of this arrangement, there were limits on the total central government wage bill which, as a result of sharp increases in wage rates, rose to almost 8 percent of GDP in 2003/04. The wage bill limits were necessary to contain a growing budget deficit, and ensure that resources were available for critical non-wage spending, including spending on medicines and school text books. However, even at that time, these wage ceilings always fully incorporated the government's plans for the hiring of workers in the health and education sectors. The 2006/07 program, approved by the IMF Executive Board in April 2007, did not include a limit on the wage bill. We agreed with the government that a limit was not needed. Despite increased hiring of teachers and health workers, the wage bill had declined to 7 percent of GDP.
We also wish to clarify that the IMF encourages its membership to make public key program documents as well as consultation reports.
IMF Mission Chief for Kenya