Press Release No. <a name="P16_75"></a>04/204

On September 24, 2004, the IMF mission that visited Kenya issued the following statement to the press in Nairobi:

"An IMF mission, headed by Godfrey Kalinga, visited Kenya during September 13-24, 2004, to conduct discussions for the 2004 Article IV consultation and for the first review of Kenya's program under the Poverty Reduction and Growth Facility (PRGF), which was approved by the IMF Executive Board on November 21, 2003. Through the PRGF arrangement, the IMF supports the implementation of Kenya's Economic Recovery Strategy (ERS). The mission met with government representatives, members of parliament, and with representatives of the private sector, labor unions, and the donor community.

"The main issues discussed during the present mission included fiscal and monetary policies, as well as governance and other structural issues. The review of fiscal policies centered on a sustainable budget framework, reorientation of expenditure consistent with ERS priorities, and steps to strengthen budget management. Discussions on monetary and financial sector policies focused on curtailing inflation, promoting an efficient financial system, and mobilizing savings for a healthy expansion of private sector credit. The strengthening of key governance institutions and measures to improve economic governance were also a central feature of the discussions.

"The mission has reached ad referendum agreement with the government on program objectives and policies for fiscal year 2004/05. This agreement is subject to review and approval by the IMF's Management and Executive Board. Provided that the agreed steps are implemented as envisaged, the IMF Board will meet to consider the completion of the first review, together with the conclusion of the 2004 Article IV consultation, in early December 2004. Upon conclusion of the first review by the Executive Board, Kenya will be able to draw down the second disbursement under the PRGF arrangement of about US$ 35 million."