IMF demands Kenya enforce fiscal, anti-graft and governance reforms to unlock new loan after economic review

The International Monetary Fund (IMF) has set out a fresh list of fiscal and governance reforms Kenya must implement before it can access a new IMF-supported program.

The new terms follow a two-week assessment by the IMF’s mission team in Nairobi, which evaluated the country’s economic health and debt position in preparation for renewed financial support.

IMF Mission Chief for Kenya, Haimanot Teferra, said the reforms will focus on restoring fiscal credibility, ensuring debt sustainability, and strengthening transparency within public institutions.

“The IMF staff team made progress in taking stock of Kenya’s latest macroeconomic and financial developments and held discussions with government officials on a reform agenda that could pave the way for a new IMF-supported program,” Teferra stated.

The team held meetings with President William Ruto, Treasury Cabinet Secretary John Mbadi, and Central Bank Governor Kamau Thugge, alongside Parliament representatives, civil society, and private sector players.

Teferra commended the government’s openness during the talks, adding that the IMF remains committed to partnering with Kenya for a “robust, sustainable, and inclusive economic future.”

If approved, the new program will replace the US$3.6 billion (Ksh465.2 billion) facility that was discontinued in March, and is expected to play a crucial role in reviving economic growth and easing the cost of living.

Earlier in June, another IMF delegation reviewed Kenya’s anti-graft and financial governance systems to assess the country’s readiness for a new funding framework. The lender emphasized that tackling corruption and improving fiscal discipline are central to securing the new deal.

The announcement comes barely a week after the World Bank urged Kenya to raise some consumption taxes including VAT and excise duty to address rising public debt, which ballooned to Ksh526 billion in pending bills by June.