Thursday, January 9, 2014

IMF’s MD Christine Lagarde Visit to Kenya: Dispatches from Mindspeak Forum

Mindspeak Poster
I attended the Mindspeak forum on Monday, January 6 2014 where the key guest was the IMF MD Christine Lagarde. Ms Lagarde was in the country for a three day working visit.

Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), will visit Kenya from January 5–8, 2014, to meet with policymakers and other representatives of Kenyan society. – IMF Press Release No. 14/01 January 2,2014

Notable things picked from this session is despite the look east policy adopted by Kenya plus the perceived thawing of relations brought about by the ICC case the country has been engaging the IMF. To date Kenya has received almost $ 1 B from the time IMF. The monies we necessitated by a rapid decline in the value of Kenya Shilling to the dollar in the year 2012. The country applied for IMF short term lending which was approved and disbursement of these funds was divided into three tranches. The last which was approved by the BoD of IMF just before Lagarde jetted in.

Other insights gain from the MD speech was the health of Kenyan Economy. As pointed out –

‘Indeed, Kenya’s economic gains over the past few years have been nothing short of remarkable. Coming on the heels of a delicate political transition, growth remains robust—at more than 5 percent in 2013. And a set of bold economic reforms have laid the foundations to lift the economy to middle-income status within the next decade—if Kenya maintains the reform momentum.’ - Christine Lagarde

This is essentially important given Kenya will be launching a Eurobond either at the end of this month or in February 2014. The assurances from the IMF will certainly go a long way in making the bond issue a success.

The other aspects which were addressed by the speech were the growth prospects for SSA tagged together with the risks to look out for. In her off the cuff remarks Ms Lagarde mention with the recovery of Western markets capital is expected to flow back from emerging markets to the developed markets as the returns there become more meaningful.

‘Overall, we expect Sub-Saharan Africa to enjoy continued robust growth—which our projections in October place at 5 percent in 2013 and close to 6 percent in 2014. But this outlook is not without risks. Policymakers must remain vigilant to threats from slower demand in emerging market economies, unfavorable changes in commodity prices, or higher financing costs.’ - Christine Lagarde

On the quest of Middle Income Status by Kenya m/s Lagarde offered a roadmap in her three C’s namely;
  1. Completing fiscal devolution; 
  2. Closing infrastructure gaps; and 
  3. Continuing regional
The full speech by m/s Lagarde can be accessed here

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