Kenya is set to initiate discussions with the International Monetary Fund (IMF) for a new lending facility after mutually agreeing to discontinue the ninth review of the existing $3.6 billion (Ksh 466.1 billion) program.
In a statement, IMF Mission Chief Haimanot Teferra confirmed that an IMF team concluded an eight-day visit to Kenya, during which they engaged in discussions with government officials on economic and fiscal policies amid evolving challenges. The current Extended Fund Facility (EFF) and Extended Credit Facility (ECF) programs, which began in April 2021, are set to expire next month.
Teferra noted that the decision to halt the ninth review follows disruptions caused by widespread anti-tax hike protests in June 2024, which impacted the program’s implementation. By October last year, Kenya had received $3.12 billion under the facility.
During a visit in December 2024, IMF Deputy Managing Director Nigel Clarke acknowledged the program’s role in strengthening Kenya’s resilience to economic and climate shocks. However, he emphasized the government’s ongoing fiscal challenges, particularly in enhancing its financial framework and managing debt vulnerabilities. Clarke also noted the delicate balance Kenya faces in addressing social and development needs while meeting its debt obligations.
The IMF has confirmed receiving a formal request from Kenya for a new financing program and is set to engage the country on the way forward. The new agreement is expected to shape Kenya’s fiscal direction amid growing economic pressures.