Kenya has budget shortfalls because the previous government borrowed from China and others like they never had to pay it back. The IMF extended them a small line of credit (compared to their existing loans) at I believe a 0% interest rate. It was to help them stabilize their budget temporarily and pay off other loans with interest coming due. Because helping Kenya is way more beneficial to everyone than letting them collapse.
The IMF made recommendations for a bunch of ways Kenya could start digging out of the hole they’re in. One of them was tax changes. Kenya’s leaders chose to simply increase taxes and say the IMF is making them to shift the blame. Instead of deploying a variety of suggestions IMF made.
That pissed people off of course. So now they’re going to try other suggestions the IMF came up with. Like eliminating government administrative waste. Such as no longer covering unnecessary travel costs and ending monthly allowances for spouses of politicians.
They aren’t. This opinion article sucks. It’s certainly a version of the story but it’s not a good one.
https://www.aljazeera.com/news/2024/7/7/why-are-kenyans-angry-with-the-imf
Kenya has budget shortfalls because the previous government borrowed from China and others like they never had to pay it back. The IMF extended them a small line of credit (compared to their existing loans) at I believe a 0% interest rate. It was to help them stabilize their budget temporarily and pay off other loans with interest coming due. Because helping Kenya is way more beneficial to everyone than letting them collapse.
The IMF made recommendations for a bunch of ways Kenya could start digging out of the hole they’re in. One of them was tax changes. Kenya’s leaders chose to simply increase taxes and say the IMF is making them to shift the blame. Instead of deploying a variety of suggestions IMF made.
That pissed people off of course. So now they’re going to try other suggestions the IMF came up with. Like eliminating government administrative waste. Such as no longer covering unnecessary travel costs and ending monthly allowances for spouses of politicians.
I agree. This is an advocacy piece, really.
Voluntarily taking on too much foreign debt and making bad trade deals with China does not equate to colonialism.