In January the IMF and World Bank threatened to cut off Kenya from more than $450 million in aid as a result of a parliamentary bill on interest rate controls. The Bank was also concerned by a bill that could halt efforts to reform the country’s civil service. Two other bills expected in the Kenyan parliament seek to introduce price controls on petroleum products and abolish fuel and foreign-exchange adjustment levies on electricity bills. If the donors punish the Kenyan government, key poverty alleviation programs in the country might be derailed.
The IMF and the World Bank are increasingly engaged with the challenge of addressing how tax avoidance and evasion affect developing countries, but need to address the role played by multinational enterprises and tax havens in exacerbating inequality and undermining countries’ domestic revenues.
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