Kenya to push for economic reforms at Bretton Woods Lima meeting

National Treasury Cabinet Secretary Henry Rotich (right) and Central Bank of Kenya Governor Patrick Njoroge (left) during the launch of the CBK's Golden Jubilee celebrations at the Crown Plaza in Nairobi on September 25, 2015. The two top officials are attending the annual Bretton Woods meeting at Lima, Peru. FILE PHOTO | NATION MEDIA GROUP 

In Summary

• Earlier Dr Njoroge told the Nation Kenya will use the forum to add its voice to a push by emerging market economies to appeal to the United States Federal Reserve to delay hiking its interest rates among other economic reform issues.
• The World Bank and the IMF had warned that a rate hike by the US Central Bank would trigger “panic and turmoil” in emerging markets.

By BRIAN NGUGI
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Kenya plans to spearhead African nations push for economic reforms in the global financial institutions as Bretton Woods members converge in Lima, Peru for the annual World Bank and International Monetary Fund meeting.

The landmark meeting which brings together ministers of finance and central bank governors from the institutions’ 188 member countries serves to discuss international economic and financial developments, the state of the global economy, and policies to reduce poverty and promote inclusive economic growth.

National Treasury Cabinet Secretary Henry Rotich has already landed in Peru and is accompanied by Central Bank Governor Dr Patrick Njoroge and other Treasury officials.

NATIONAL AGENDA

Earlier, Dr Njoroge told the Nation Kenya will use the forum to add its voice to a push by emerging market economies to appeal to the United States Federal Reserve to delay hiking its interest rates among other economic reform issues.

For the first time in close to a decade, the Federal Reserve in September failed to raise its rate triggering relief in emerging economies like Kenya.

The World Bank and the IMF had warned that a rate hike by the US Central Bank would trigger “panic and turmoil” in emerging markets.

The Bretton Woods’ institutions have asked the Federal Reserve to wait until the global economy gets back on its feet.

“Developing markets will be making an appeal to the US at the IMF and World Bank meeting to delay the lowering of interest rates by the US Federal Reserve Bank,” Dr Njoroge told the Nation.

FED RATE HIKE EFFECTS

Experts say a rate hike by the US central bank would likely lead to a stronger dollar, leading to capital flight in emerging markets. This could ultimately affect developing nations’ currencies, exports, and even employment levels.

CBK froze its lending rate at 11.5 per cent last month thanks in part to a decision by the US Federal Reserve not to increase its interest rates which relieved the pressures on the shilling and other currencies in emerging markets.

The Lima meeting will also explore the links between inequality and poverty, and the practical measures that can be taken by nations to address the same as many emerging markets set their sights on transitioning into higher income economies.

The gatherings will also provide a forum for civil society, the private sector, academics and others to engage in discussions on economic issues.

World Bank Group President Jim Yong Kim and IMF Managing Mirector Ms Christine Largade will make key notes addresses during the meetings.