Press Release No. 06/63

Press Release: Statement by IMF Managing Director Rodrigo de Rato After Meeting with Kenya's Minister of Finance, Mr. Amos Kimunya

March 28, 2006

Mr. Rodrigo de Rato, Managing Director of the International Monetary Fund (IMF), issued the following statement in Washington D.C. following his meeting with Kenya's Finance Minister, Mr. Amos Kimunya, on March 27.

"I have had the privilege of meeting Kenya's new Finance Minister, Mr. Kimunya. We held productive discussions on food security, governance, and on issues related to the completion of the second review under Kenya's Poverty Reduction and Growth Facility (PRGF) arrangement with the Fund.

"I noted with deep concern the reports of immediate food insecurity in parts of Kenya and appreciated Minister Kimunya's assessment of the drought implications. The recent drought follows several seasons of poor rains and is Kenya's worst since 2003. It is currently estimated that about 3.5 million people are in need of emergency assistance.

"Against this background, I urge the international donor community to respond generously and pro-actively in addressing the food needs of Kenya's people. It will be critical to respond in a timely manner to avoid the human tragedies and adverse economic consequences that have all too often been associated with droughts in the past.

"The IMF is also playing its part to support, within its mandate, the affected people in Kenya. I confirmed to Minister Kimunya that additional drought-related public expenditure can, and indeed should, be accommodated under the fiscal program. Moreover, the IMF could increase its financial support, if needed to meet a drought-related balance of payments need.

"On governance, the Minister apprised me on the steps taken to date and the determination of Government to press ahead, especially in the area of investigations and prosecutions. We agreed on the desirability of continuing to take further actions to strengthen governance framework. I noted that the Fund was closely cooperating with the World Bank and the authorities in this area, and that continued implementation of a pro-active and clear governance agenda would unlock increased financial support by the donor community. This would help accelerate progress toward meeting the Millennium Development Goals. We agreed that the ongoing discussions toward the second review under Kenya's PRGF arrangement should be accelerated with a view to having an IMF mission visit Nairobi in late April/early May, which would discuss a new program for 2006/07."