E-Clips:- Business Pictorial - Donors Caught By Surprise Over Githongo Resignation

Mr John Githongo’s resignation yesterday caught the donor community by surprise.

International Monetary Fund (IMF) senior country representative Jurgen Reitmaire asked the government to explain the circumstances under which the highly regarded anti-corruption czar resigned.

He said the government should not dilute the important office now that Githongo has quit but should instead get a replacement equal to the task. Speaking by the phone, Reitmaire said the IMF had no intention of reviewing its programme due to recent corruption allegations against the government by British envoy Sir Edward Clay.

"This is not the moment to say whether the fund is satisfied with government’s effort to fight corruption or not. We must wait for the IMF review mission to visit the country to determine whether our programme is on course or not," he said.

Last year, the government successfully negotiated the Poverty and Growth Reduction Facility (PGRF) that saw the IMF release Sh26 billion for "pro-poor expenditure".

The IMF, he said, took Githongo’s resignation and Clay’s remarks as "a mere coincidence". "The office of governance and ethics is a strong tool in the war against corruption and we are waiting to see the outcome of investigations the government promised after Clay’s remarks last week," he said.

However, senior officials at the World Bank country office remained mum, opting instead to support the earlier position taken by the country director Mahktar Diop. In a statement last July, Diop said the Bank would not hesitate to freeze funding to Kenya if evidence showed that corruption levels were rising.

Sources say the Bank was closely monitoring the ongoings in the government although analysts said top financial managers might be on the receiving end at the anticipated donor consultative meeting scheduled for late next month.

"If evidence showed that government corruption was returning to the levels that prevailed in the 1990s, we would not hesitate to withhold assistance," warned Diop. The bank, which has given close to Sh40 billion to implement the economic recovery strategy in the last two years, is still waiting for the outcome of the investigations on the Aglo Leasing passport scandal. "We are eager to see the outcome of the ongoing investigations, and even more eager to see action taken to ensure that the safeguards are in place to avert a repetition," he says.

The Bank, like the IMF, will undoubtedly monitor closely to see the government’s reaction toward Githongo’s departure and the person appointed to replace him.

Should the government rub the donors the wrong way, the Sh300 billion pledged by the two institutions and other donor agencies at the last donor consultative meeting held in Nairobi in November 2003 could be at stake.

Yesterday, Finance Minister David Mwiraria and Permanent Secretaries of various ministries were meeting at a Nairobi hotel negotiating for more assistance from the Arab League.

Mwiraria told the Arab donors that the government required Sh120 billion annually to implement the donor-driven economic strategy.