Kenya has applied for a fresh loan program from the International Monetary Fund (IMF), aiming to roll over about US$800 million left unused from its existing arrangement, according to Treasury Cabinet Secretary John Mbadi.
- •The move follows the government’s decision to forgo the ninth and final review of its current IMF program, which expires next month.
- •The decision sent Kenya’s dollar bonds lower, but Mbadi dismissed reports suggesting a fallout with the IMF over unmet targets.
- •Mbadi also expressed optimism that a new IMF program could be established in July—overruling speculation by Special Presidential Economic Advisor David Ndii that Kenya would ditch the IMF program after it lapses in April.
“It is not correct that there is any problem with the IMF. That narrative people are driving is not accurate. If anything, the IMF found our fundamentals better,” Mbadi said.
Kenya has grappled with controlling its fiscal deficit and improving revenue collection—key conditions under the IMF program. The nation has struggled to stabilize its finances following years of heavy borrowing, which has strained its ability to service debt.
Citing unnamed sources, Bloomberg had reported last week that Kenya failed to meet the requirements for the ninth review. However, Mbadi attributed the decision to skip the review to time constraints.
The existing program, valued at US$3.6 billion under the Extended Credit Facility and Extended Fund Facility and $541.3 million under the Resilience and Sustainability Facility, was established in April 2021. By the time of the cessation, only US$3.12 billion and US$180.4 million from the respective facilities had been disbursed.
Despite the missed review, S&P Global Ratings warned that any disruption to IMF funding could complicate Kenya’s debt-servicing strategy and delay other financing. The World Bank has also earmarked US$800 million, while the United Arab Emirates (UAE) has pledged US$1.5 billion in funding—both of which are likely to be delayed. Mbadi placated these concerns by asserting that the World Bank’s loan was independent of the IMF agreement.
As President William Ruto’s administration navigates economic recovery, the ability to secure favorable terms from the IMF may prove pivotal in managing the nation’s mounting debt burden.
