Kenya has requested the International Monetary Fund (IMF) to drop the ninth review of the country’s existing loan program—tagged at over KSh 460 billion—and requested a fresh arrangement instead.
- •The shift suggests that the Kenyan government is recalibrating its approach to IMF engagement at a time when fiscal pressure and external debt obligations are on the rise.
- •The IMF mission team, which met with President William Ruto and top state economic officials, concluded discussions without disbursing the next cache of funds, worth KSh 103.6 billion, under the current Extended Fund Facility and Extended Credit Facility programs.
- •While the Bretton Woods Institution acknowledged Kenya’s request for a new program, it remains unclear whether the government is seeking more flexible terms, a longer repayment horizon, or a broader reset of its fiscal commitments.
“The mission team engaged with the Kenyan authorities on recent developments and the macroeconomic outlook. The IMF has received a formal request for a new program from the Kenyan authorities and will engage with them going forward,” the IMF said in a statement.
The decision comes as Kenya struggles to stabilize public finances, maintain investor confidence, and manage debt repayments. The Extended Fund Facility (EFF) is designed for countries facing deep, structural economic challenges that require long-term reforms. It provides financing for three to five years, with repayment over 4.5 to 10 years thus allowing governments to implement policies that restore stability.
On the flip side, the Extended Credit Facility (ECF) serves low-income countries dealing with prolonged balance-of-payments problems, offering concessional loans with near-zero interest rates. It runs for up to four years, with a 5.5-year grace period and repayment over 10 years.
Kenya’s IMF programme began in April 2021 and is due to expire in April. The agreement focused on fiscal consolidation, governance reforms, and restructuring state-owned enterprises. It also introduced new taxes, proposed spending cuts—leading to public backlash and online petitions against further IMF lending.
While the program helped Kenya secure critical funding, concerns over austerity and economic hardship remained prevalent. Last year’s June protests against the Finance Bill 2024 were pitted against the institution.
With global financing conditions still tight, the shape of the next IMF deal will be closely watched by markets and policymakers alike. Kenya has momentarily regained some relief from credit rating agencies such as Moody’s and Fitch—who upgraded the country’s status earlier this year.
