Kenya has signalled plans to enter a fresh loan program with the International Monetary Fund (IMF) as the country grapples with a tightening fiscal environment and a public debt stock that has now reached Ksh11.8 trillion.
Central Bank of Kenya Governor Kamau Thugge confirmed the development during the post-Monetary Policy Committee briefing in Nairobi, noting that IMF staff are expected in the country in January to advance negotiations. Kenya’s previous Ksh465 billion arrangement with the Fund expired in April.
Talks have stalled for months, largely due to disagreements over the treatment of securitized loans, despite several engagements involving senior government officials and President William Ruto.
The government has recently signalled a shift from heavy borrowing, instead eyeing securitization of bonds and strategic divestment from state-owned enterprises. Treasury Cabinet Secretary John Mbadi stressed that Kenya can no longer rely solely on higher taxes or fresh loans to finance major infrastructure projects, saying nearly half of all revenue is already absorbed by debt repayment.
The push for a new IMF program comes as fresh data shows Kenya is now the world’s seventh-largest borrower from the IMF, with outstanding obligations amounting to SDR 2.95 billion approximately Ksh519.8 billion. Only Argentina, Ukraine, Ecuador, Egypt, Pakistan and Côte d’Ivoire owe the lender more.
President Ruto has previously stated that Kenya intends to phase out external borrowing for development projects over the next 10 to 20 years, part of a long-term strategy to reduce reliance on foreign debt.
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