Tuesday, November 18, 2008

Implement Waki & Kriegler Reports or we withhold aid, says EU

The European Union on Monday threatened to withhold budgetary support if the Waki and Kriegler reports are not implemented.

European Commission head of delegation to Kenya Eric van der Linden said the Government should also review the Constitution and land policies as agreed during the peace talks that culminated in the Grand Coalition Government. The move to withhold budgetary support would have an adverse effect on Government programmes. It would affect funding in education, health, especially the fight against HIV and Aids, and infrastructure projects, mainly roads construction. It will especially exert pressure on this year’s budget, which has a huge deficit.

The Government had planned to raise $500 million from the international market through a sovereign bond. But due to the international financial meltdown, that is no longer possible. Furthermore, the Kenya Revenue Authority has already sent notice that it is unlikely to meet revenue targets for this financial year.

If the EU withholds the support, the Government will be forced to borrow heavily from the local market to plug the budget deficit, causing inflation and interest rates to rise.

Although the constitutional review and land reforms were part of Agenda Four of the coalition deal, the Government has been accused of dragging its feet in addressing the two issues. Asked what the conditions for the release of the budgetary support were, Mr Linden said: “We are waiting for the Waki and Kriegler reports to be implemented. The development group is also looking at Agenda Four. We are looking if all conditions are met.” He said the international community also wanted to see issues related to corruption addressed, adding that impunity must be a thing of the past.

French ambassador Elisabeth Barbier said the international community was closely “watching and listening” to what the Government would do with the Waki report. She said they expected the Cabinet to discuss the implementation of the report when it meets this week. “We are keen to see the implementation of the report … there has been difficult debate but we consider there is time for political leadership of this country to take a position,” said Ms Barbier. She said the Waki team handled a complex mandate and was transparent and objective in the manner it recommended an end to impunity in the country. Ms Barbier said although there was need for further investigations, it was also necessary to reform the police force as proposed by the Waki Commission.

The two were speaking at a press conference at the French ambassador’s residence when they briefed the media on European Development Days. Kenya’s 2007/2008 budget has a deficit of Sh5.3 billion, with this gap of about 5% expected to be largely filled by donors. The EU is one of the top donors. Since 2002 it has financed the Government budget to the tune of Sh28.4 billion.

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