In March, Kenya took a strategic step toward economic self-determination when its finance ministry announced that it will not need funding from the International Monetary Fund for the remainder of the fiscal year, which ends in June. Instead, the Kenyan government raised 588 billion shillings ($4.5 billion) through the initial public offering of Kenya Pipeline Company, the sale of a stake in Safaricom, and the issuance of new Eurobonds. It is more or less five times what the IMF would have offered in a year. As Finance Minister John Mbadi stated, Kenya does not need “bailouts.”
By leveraging its assets and accessing international capital markets on its own terms, Kenya lays claim to the kind of fiscal sovereignty that the multilateral system was designed to strengthen (not replace). Still, structural tensions remain: IMF representatives traveled to Nairobi in February, and talks will resume at spring meetings of the World Bank and IMF this month. But as Kenya’s budget comptroller, Margaret Nyakang’o, warned, excessive dependence on IMF financing risks the government ceding decision-making discretion to the institution. “We must not be mere puppets,” he said.
Kenya’s fears are not unfounded. In fact, the defining feature of the multilateral financial architecture is that one party sets the conditions and the other suffers the consequences.
As the United Nations independent expert on external debt, other international financial obligations and human rights, I have spent almost five years documenting this asymmetry, the reiteration of which makes it impossible to ignore it. My work on Argentina under my mandate revealed how successive IMF programs (designed without significant participation of the affected population) aggravated a debt trap that has become the Fund’s largest exposure. The last contingent loan for the country (for $20 billion) was approved by executive decree, bypassing the Argentine legislature.
In my report to the UK on its colonial-era tax treaty with Sierra Leone, I highlighted how bilateral deals negotiated decades ago continue to take away tax capacity from countries that had no power to influence terms. Likewise, in letters I sent to several European governments (including those of France, Germany and the UK) about their simultaneous cuts to official development assistance I noted that the populations bearing these costs had no say in the decisions.
These are not isolated failures, but rather symptoms of a governance structure in which the most vulnerable have no voice. This is especially evident in the IMF quota system. Quotas determine how much a country can borrow, its share of “special drawing rights” (the IMF’s reserve asset) and, most importantly, the weight of its vote. The 16th general review of quotas (completed at the end of 2023) injected 50% more resources into the Fund, but did not change the voting percentages. The 17th review concluded without results. The task has been quietly postponed until 2028. This month’s spring meetings will be the first major accountability moment since those missed deadlines.
The lack of significant changes would be by choice, not carelessness. The formula used today to calculate quotas is based on variables (including GDP measured at market exchange rates and the degree of trade openness) that have a structural bias in favor of advanced economies. But the deeper question is how much can be returned and at what human cost; This is a principle that those burdened by sovereign debts understand much better than distant creditors.
And making small tweaks is not enough, a new formula is needed. IMF member states need to be bolder in demanding genuine structural changes. Representation in multilateral governance must be people-based. The simplest version would be the “one country, one vote” model that governs the UN General Assembly. Even better would be to weight the votes according to the population, so that representation in the institution would conform to the principle of universal suffrage for adults, the basis of legitimate governance.
It is not a utopian idea. Now that great powers apply warlike rhetoric to trade, capture territory, and remove leaders, it is more evident than ever that countries with sufficient economic and military clout invoke the rules-based order selectively. In this context, the irrationality of a quota system that gives the richest economies almost permanent control of an institution that professes to serve all its members is obvious.
The need for three reforms stands out here. The first is a new quota formula that gives more voting power to emerging and developing economies. Second, affected populations must have influence over the structure of IMF programs, rather than only being consulted when the conditions are already set. Finally, we must move from fiscal governance based on compliance to one based on legitimacy. When program conditions do not take into account a country’s constitutional framework and political context, the problem is design, not compliance. Countries’ fiscal frameworks must be seen as an expression of the pact between their governments and citizens, not as a technocratic list of conditions to meet.
Kenya’s decision to stand on its own two feet is not a rejection of multilateralism, but rather an example of what it should be like: a system where countries participate as sovereign partners, not as dependent entities. Although it may seem like a mere procedural act, the 17th general review of quotas will be a test of whether the system can still reform itself. If lasting reform is not achieved before the extended deadline of 2028, the world will no longer have any doubts about whose interests the system’s architecture will continue to serve.
Attiya Waris, Professor of Tax Law and Policy at the University of Nairobi and Senior Research Fellow at the Georgetown Center on Global Health Policy and Policy, is the United Nations independent expert on external debt, other international financial obligations and human rights.
