KENYA: Donors Happy With Reforms, Pledge 800 Million Dollars in Aid

By IPS Correspondents Reprint | | Print |

Barbara Borst

PARIS, Dec 16 1994 (IPS) - Donors that cut off aid to Kenya three years ago citing lack of economic and political reforms, Friday pledged 800 million dollars in aid to the East African nation in recognition of Nairobi’s more recent bid to put its house in order.

“We struck a very good rapport with donors,” Musalia Mudavadi, Kenya’s finance minister told reporters after a two-day meeting with donor governments and international agencies at the World Bank’s Paris offices.

One year after multi-party elections were held in 1992, ending 12 years of one-party rule, donors had pledged 850 million dollars in new aid to Kenya, provided that the government’s significant progress on economic and political reforms continued.

“About a year ago, when we last had a consultative group meeting, we had just managed to get through a very difficult period,” he said. “Donors resumed support for Kenya then.

“They also put an important rider on it that the reform process be kept on track if at all we expected to continue soliciting international support for economic reform.”

Mudavadi said his government has since then made good on its promise to institute reforms and this has paid off.

“The political situation is much better in Kenya. Ethnic clashes have subsided; in 1994 we hardly had any incidents. The press continued to become stronger. The opposition aired its opinions freely and aggressively. The climate is better.”

Francis Colaco, World Bank director for Eastern Africa, confirmed that the donors were happy with recent developments in Kenya, although some differences remained.

“Based on the track record performance donors felt had been established in economic as well as political areas, relations now between the Kenya government and donors are productive,” he said. “That does not mean there are no differences of views. (But) that is to be expected.”

In their press release, donors from 13 countries and eight agencies “complimented the government on progress” made during the year, notably in the control of inflation, a 3.3 percent economic growth, the lifting of foreign exchange controls and abolition of price controls.

However, they said that “reform fell short of expectations” in the areas of privatisation of state enterprises and in the control of unauthorised expenditures.