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Financial Reform Process in Kenya: 1989–96
Author(s) -
Ngugi Rose W.
Publication year - 2000
Publication title -
african development review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.654
H-Index - 32
eISSN - 1467-8268
pISSN - 1017-6772
DOI - 10.1111/1467-8268.00015
Subject(s) - liberalization , political science , financial system , economics , welfare economics , humanities , finance , business , market economy , philosophy
The main objective in financial reform process is to create a suitable financial environment that will facilitate economic growth for the financially repressed economies. The sequencing and timing of the reform process is, however, imperative for the realization of positive results. For example, it is proposed that macro‐stability and economic growth must be achieved and sustained, for successful financial reform. In addition, the legal and regulatory framework should be strengthened and easily enforced. In Kenya, the reform process was implemented simultaneously with trade liberalization and the opening of the capital account, as a response to a realized need to promote domestic resource mobilization. However, the process was characterized by macroeconomic and financial instability, indicating `misses’ on the proposed sequencing process. As a result, experience with financial reform indicates minimal support of the theoretical expectation and shows secondary repression symptoms. Le processus de réforme financière a pour principal objectif d’instaurer un cadre financier propre à favoriser la croissance économique dans les pays aux dispositions financières contraignantes. Or, le choix du moment et l’enchaînement des mesures de réforme sont importants pour aboutir à des résultats positifs. Au Kenya, la réforme financière a été menée de front avec la libéralisation du commerce et l’ouverture du compte de capital. Toutefois, le processus de réforme a été caractérisé par l’instabilité macroéconomique, ce qui n’a pas permis de respecter l’échéancier prévu. Les résultats montrent que le schéma théorique n’a guère été suivi et présentent des signes d’une répression financière secondaire.