Donors turn back on Kenya

2005-04-13 13:22

Nairobi - International donors on Tuesday refused to renew funding to Kenya and pressed the government to intensify its war on corruption and implement delayed reforms, despite spirited pleas from the east African nation.

At the end of a two-day a meeting here to reschedule unmet aid pledges and tap fresh ones, outgoing World Bank representative in Kenya Makhtah Diop said new funding was made conditional on the Nairobi's commitment to reforms.

"We discussed what are the main important policy reforms that the government needs to undertake ... this year to be able to mobilise resources that were committed last year," Diop told reporters at the end of the meeting.

In a similar meeting in 2003, donors pledged to give Kenya around US$4.1bn in grants and low-rate loans, but a significant amount remains undelivered owing to resurgence of corruption and other forms of economic malfeasance.

Faced with the wrath of donors, the government presented a two-year action plan in a bid to refresh its often repeated commitment to promote good governance and kickstart the faltering economy.

"We have agreed to an action plan that will move the relationship between the government and development partners forward," Kenyan Finance Minister David Mwiraria said.

As part of the plan the government pledged to give teeth to magistrate courts and other anti-corruption bodies as well as name a special judge to liquidate assets obtained through corruption.

It also requested help to trace and return up to billions of dollars stashed abroad.

Donors, who have estimated that graft has cost the government up to $1bn since 2002, nearly a fifth of the country's 2004-05 official government spending of about $5.5bn, welcomed the plan.

"It is a very good starting point and a good basis on what the government will be doing later on corruption," Diop said, falling short of calling for concrete action.

"I think the action plan has set a good basis for the future... in the area of governance, not just corruption, but good governance," European Union representative in Kenya Derrek Fee said.

Fee insisted that time was not appropriate now to approve planned budgetary support for Kenya, which was first delayed in July 2004.

Still under lock and key are millions of dollars worth of anti-graft funding from the US and Germany, which was cancelled early this year amid howls of protest from western donors.

Opening the tense meeting on Monday, Kenyan President Mwai Kibaki reported a raft of bottlenecks that have stymied his anti-graft campaign, which brought him to power in 2002, and appealed for leniency from the donors, whose help is key to economic growth.

Officials said donors would not unlock their cash flow until old conditions were met. Among them is passing laws on government procurement, financial management in the treasury, privatisation of state-owned firms, and prosecuting corrupt officials.

- AFP