Front Matter

Front Matter

International Monetary Fund
Published Date:
September 1985
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IMF Institute

Financial Policy Workshops:

The Case of Kenya

International Monetary Fund

Washington, D.C. 1981

Library of Congress Catalog Card Number: 81-4123 AACR2

International Standard Book Number: 0-939934-37-X

Reprinted July 1989

Reprinted (paperback) January 1985

International Monetary Fund

Washington, D.C. 20431


The workshops presented here comprise an actual case study. The book is intended primarily as a text for the IMF Institute's training course in Financial Analysis and Policy, but it may also be of interest to policymakers at the national level.

Established in 1964 to conduct training courses for officials from financial agencies of the Fund's member countries, the IMF Institute aims to assist principally, but not exclusively, representatives from the developing countries. In recent years, its activities have expanded rapidly to meet the growing needs of these countries for financial and technical assistance with their economic problems. Conducted in English, French, and Spanish, the courses have helped to disseminate knowledge about the statistical framework and techniques of analysis developed by the Fund, as well as to make the Fund's activities and procedures better known; nearly 3,000 officials from 134 countries have participated in over a hundred courses.

The Financial Analysis and Policy course draws heavily on the Fund's techniques of analysis and reflects the Fund's experience with programs of balance of payments adjustment. A policy-oriented course, it focuses on effective demand management policies while stressing the importance of measures to improve supply and to increase saving and investment. It also reviews the statistical framework and the tools of quantitative macroeconomic analysis by presenting studies of the effectiveness of the instruments of monetary, fiscal, and balance of payments policies as related to economic objectives. These workshops represent an effort to illustrate in a practical manner the kind of techniques studied in the course.

I am confident that this publication will prove useful to interested institutions and individuals in Fund member countries, particularly developing countries, by enhancing the understanding of the working of the major financial policy instruments. I hope that this improved understanding will contribute to better management of national economies. It should at the same time promote international monetary cooperation, which is the main purpose of the Fund's existence and which is essential for the orderly development of a world economy that has become increasingly interdependent.

J. de LarosiÈre

Managing Director

International Monetary Fund


This book offers a series of workshops on Kenya that are used as a case study in the IMF Institute's course on Financial Analysis and Policy for officials of the Fund's member countries. They represent a practical application of economic concepts and theories.

Since its inception, the IMF Institute has steadily endeavored to make its courses relevant to the needs of the participants, who are officials of financial agencies of Fund member countries. One way to reach this general objective has been to develop teaching material based on recent country experiences. A major step in this direction was the introduction in the early 1970s of a series of workshops on a specific country used as a case study in the Financial Analysis and Policy courses. This has served to achieve a more appropriate balance between the theoretical and the applied parts of these courses.

The workshops are designed to involve the participants in all phases of work leading to the formulation of a consistent financial program so as to enable them to apply what they have learned to their own countries. Each workshop deals with a particular sector of the economy, provides relevant background information, and contains exercises and questions relating to the statistical data. Some workshops also require the participants to make sectoral forecasts based on assumptions about the “state of the world” and about policies; these forecasts are brought together in a consistent whole in the final workshop. Participants must adjust policies and objectives in order to formulate their own financial programs.

The decision by the Fund to publish the workshops has been taken in response to the increasing number of requests for copies of these workshops, which could not be met because of the confidential nature of some of the material contained in the original version of the workshops. In order to ensure that the published version contains only nonconfidential material, discussions on the content of the workshops have been held with the Kenyan authorities, who have agreed to their publication and have also made valuable suggestions that have been incorporated in the published version.

The workshops presented by the IMF Institute have been changing over the years in the light of the Fund's experience with economic problems of member countries. They will certainly continue to evolve in the future. Therefore, from this point of view, the published version is not a final product.

I wish to stress that these workshops must not be construed as representing necessarily the techniques used by the Fund staff in dealing with member countries. They reflect, however, the general approach utilized by the Fund's economists in their analysis of the economy of a country.

While the workshops included in this publication incorporate the comments received from other departments of the Fund, the responsibility for any errors or inconsistencies rests with the IMF Institute.



IMF Institute


The workshop publication project has been carried out by the IMF Institute under the overall direction of Mr. U Tun Wai, Deputy Director, with the assistance of Mr. Ciro Tognetti, Senior Advisor, and has been coordinated by Mr. M. Haris Jafri, Advisor. Many present and former staff members of the IMF Institute have contributed to the drafting of the chapters included in this publication: in particular, Mr. Herbert K. Zassenhaus, Deputy Director (retired); Mr. Andrew Gantt, Chief, English Division; Mr. Chorng-huey Wong, Assistant Chief, English Division; Mr. Øystein Pettersen, Senior Economist; Mr. Jeffrey M. Davis, Senior Economist; Mr. Sotirios Kollias, formerly Senior Economist, at present with the Bank of Greece; and Mr. Ivan A. Bello, Economist.

Valuable comments on the workshops have been received from other departments of the Fund, including the African Department, the Exchange and Trade Relations Department, the Fiscal Affairs Department, the Research Department, and the Bureau of Statistics. Particular mention should be made of the following staff members for their comments: Exchange and Trade Relations Department—Mr. Subimal Mookerjee, Deputy Director, and Mr. Manuel Guitián, Advisor; Fiscal Affairs Department—Mr. Sheetal K. Chand and Mr. Charles Y. Mansfield, Senior Economists, Fiscal Analysis Division; Research Department—Mr. Carl P. Blackwell, Assistant Director, and Mr. Michael C. Deppler, Assistant Chief, Current Studies Division; Mr. George von Furstenberg, Chief, and Mr. Mohsin S. Khan, Assistant Chief, Financial Studies Division; Bureau of Statistics—Mr. Akira P. Nose, Assistant Director; Mr. Arie C. Bouter, Assistant Director, and Mr. Mahinder S. Gill, Assistant Chief, Balance of Payments Division; Mr. Jonathan V. Levin, Assistant Director, Government Finance Statistics Division; and Mr. Jai B. Gupta, Chief, and Mr. Samir I. Fawzi, Assistant Chief, Financial Statistics Division-A. The volume has been edited by Mrs. Ella H. Wright, in consultation with Mr. Norman K. Humphreys, Chief Editor.


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