EAC & The HornNews

Kenya seeks IMF aid to escape money laundering ‘grey list’

Authorities in Kenya are facing a crucial challenge as the country seeks to break free from the money laundering ‘grey list’ set by the Financial Action Task Force (FATF).

The country is pinning its hopes on strategic alliances with the International Monetary Fund (IMF), the World Bank, and other key partners to develop robust strategies for speedy compliance.

National Treasury Cabinet Secretary Prof. Njuguna Ndung’u has revealed that the country is collaborating with the US, European Union, and the United Kingdom to exit the FATF’s grey list.

While appearing before a House Committee on Monday, Prof. Ndung’u said there is significant technical assistance expected from the IMF, World Bank, EU, US, and UK, indicating a coordinated effort across institutions will be needed to address the challenges.

Despite concerns about the impact of grey-listing on Kenya’s standing in global financial markets, especially following the recent settlement of part of the $2 billion Eurobonds maturing in June, Prof. Ndung’u remains optimistic. He told MPs that while the institution’s reputation is being questioned, Kenya’s credit rating may not necessarily worsen.

The FATF’s grey list, a result of lax regulations on combating money laundering, terrorism financing, and proliferation of weapons of mass destruction, has also affected other East African Community (EAC) member states.

Read also: Controller of Budget gets an earful from Treasury

Address risks cited by FATF

Uganda, initially placed on the list, made significant improvements and was withdrawn, leaving Tanzania, South Sudan, the Democratic Republic of Congo (DRC), and Kenya under increased scrutiny.

Kenya, accounting for a significant portion of the EAC’s member states, is now under pressure to address the risks cited by the FATF, including flows of money linked to terrorism financing and the surge in cryptocurrencies.

The potential misuse of cryptocurrencies to aid militant groups, such as the al Shabaab group in neighboring Somalia, adds to the urgency of Kenya’s efforts to combat money laundering.

This month, Kenya made a high-level political commitment to work with the FATF and to strengthen the effectiveness of its anti-money laundering and counter-terrorist financing.

Other countries across Africa under increased monitoring include Burkina Faso, Cameroon, Mali, Mozambique, Namibia, Nigeria, Senegal, and South Africa.

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