Billions of dollars in assistance to Kenya from the World Bank may be at risk if the government does not take adequate steps to rein in corruption, the institutions outgoing country director, Makhtar Diop, said Thursday.
Diop stressed that the Bank was not yet considering any reduction in loans, credits and grants to Kenya, which totaled about 5 billion US dollar as of last month, but that it would have to review assistance if the situation worsened.
– We do not think at this stage there is widespread corruption that would make us change programs in Kenya, he said. Still, Diop said that recent developments, including well-publicized donor allegations that Kenyan President Mwai Kibakis government is failing to meet promises to crack down on rampant graft, were a cause for concern.
– The recent developments have raised concern and we are watching them very carefully. If, at some point, we think that the fight against corruption is not taking the path the government of Kenya has set as standards, we will go back to the drawing board, he said.
Kibaki has come under stinging criticism, both domestic and international, to rein in government corruption which donors estimate may have cost Kenya up to one billion US dollar (5,6 milliarder DKR) since 2002, nearly a fifth of the east African countrys 2004-05 official government spending of about 5,5 billion dollar.
The United States and Germany have both suspended millions of dollars in aid to Kenya and the European Union, the countrys largest collective donor, Japan and Canada have warned of consequences if inaction on graft continues.
The World Bank said on Thursday that donors will take the Kenyan government to task IN April on graft and the sluggish pace of reform before they decide whether to pledge funds to rebuild the economy.
The World Bank is coordinating a consultative group meeting on April 11-12, an annual forum when the government appeals for specific financial support from all its donors, and the donors make pledges. – The meeting will ask the government critical questions on economic reforms contained in the Economic recovery strategy and on governance which has been a central issue in the last six months, said Diop.
In 2003, donors, welcoming the election of Kibakis government the previous December, pledged 4,1 billion dollar over the next three years for projects to be implemented by non-governmental organizations and the government. But the disbursement of the funds has been slow partly because of concerns about how funds were being used, and analysts say Kenya will face an uphill task to convince donors to be as generous this time round.
Diop said donors would like to see the government take concrete action against those suspected of corruption to restore its credibility in the fight against graft. He also said donors would like to see the government accelerate the enactment of laws to speed up privatization of state firms, reform the financial sector, and strengthen public financial management and procurement procedures.
Diop said furthermore that the best ways to end corruption would be for the government to liberalize the economy by speeding privatization of ailing state-owned firms and easing licensing requirements.
– By privatizing ailing state-owned firms you will have less opportunity for corruption. Corruption comes because the government still controls a lot of things which is not necessary under the liberalization, Diop said, adding that privatization will turn the Kenyan economy, which is currently reeling from two percent, into a vibrant one.
The Kenya Times meanwhile reports that Kenya on Thursday received about 819.672 US dollar from Australia to strengthen it democratization process. Signing the agreement between the Australian government and Institute for Education in Democracy in Nairobi, Brett Aldam, the Australia acting high commissioner said the three year partnership agreement would assist Kenyas democratic process.
He called Kibaki to shift his style of leadership from rhetoric and act on alleged corruption. Part of the money will also be used in funding pressure groups engaged in mass actions, strengthening electoral processes, voter education, research, dissemination and institutional strengthening.
In related news, The Standard (Kenya) notes that the Kenyan government has turned to the World Bank to help it recover 956 million dollar stashed abroad. According to Diop, Justice and Constitutional Affairs Minister Kiraitu Murungi approached the Banks regional vice-president, Gobind Nankani, for help to tackle the problem that has persisted for more than two years now.
Diop said the Bank had agreed in principal to help the government by offering technical assistance. But he said that while the Bank had agreed to help the government, he doubted the Banks capacity to follow up on the looters.
Kilde: www.worldbank.org
