Global lender IMF impose ban on Uhuru successor against further power price cuts
Raila Odinga and Deputy President William Ruto, both in the race for the top job in the country, have promised that they will reduce the cost of living in the country.
The one thing, however, that both of them refrain from mentioning in their political rallies is the International Monetary Fund’s decision to do away with intervention loans provided to Kenya to help reduce the prices of petroleum and electricity, thereby easing the lives of Kenyans.
If the loan subsidy is scrapped, then high prices of power will spill over to the government of Uhuru’s successor. This means that the respective administration of Raila or Ruto’s government will be faced with a real challenge to address.
According to the IMF, Kenya Power and Lighting Company is presently struggling with cash flow issues which is a big problem.
“Any future reduction in electricity tariff should be avoided unless fully backed by well-identified and achievable cost-saving measures to prevent deterioration of KPLC’s liquidity and profitability situations,” stated IMF.
The Government of Kenya had planned to achieve a power tariff cut by the end of March this year through renegotiation of Power Purchase Agreements (PPAs) between Kenya Power and power producers to lower its huge yearly dues to the involved power producing firms.
The International Monetary Fund had earlier approved an extra Sh28billion lending to Kenya in the third review of the country’s extended fund facility and extended credit facility, which brought the total amount that Kenya has received from the global lender since the start of the 38-month programme in April last year to Sh142.2billion. The loan was met with received reactions from Kenyans.
