The Kenyan government will have to restructure nine state-owned corporations as one of its commitments to access the International Monetary Fund (IMF)’s Ksh.255.9 billion shillings support package.
Among the parastatals that have been slated for restructuring include national carrier, Kenya Airways(KQ), Kenya Power and Lighting Company (KPLC), Kenya Electricity Generating Company (KenGen), and Kenya Ports Authority (KPA).
Other parastatals include the three largest public universities namely the University of Nairobi, Kenyatta University and Moi University.
According to IMF, profits recorded by public entities declined by a third to Ksh.62.5 billion during the 2019/2020 fiscal year on account of reduced profits and losses.
The IMF’s statement coincides with a call by the Nairobi Securities Exchange (NSE) for the privatisation of a number of parastatals as one of the ways of raising funds to help the government manage its fiscal deficit.
Further, the government is expected by the IMF to work on a comprehensive governance reform agenda to tackle corruption, especially in public procurement.
IMF expects the government to set up a state procurement portal to ensure transparency in the public tendering process and procurement as well as the operationalization of the access to information act of 2016 by the end of April 2021
To strengthen the monetary policy framework and safeguarding financial stability, the Central Bank of Kenya (CBK) will by the end of June 2021 publish a white paper outlining planned reforms to improve the monetary policy framework.
The IMF also wants the government to broaden the tax net and reduce the remaining tax exemptions that have led to revenue leakages over the years.
The implementation of these reforms is what will be evaluated every six months over the 38-month programme to allow the release of more resources by the IMF to Kenya’s public coffers.