Kenya is set to initiate talks for new funding with the International Monetary Fund (IMF) this week as the multilateral lender’s staff team jets into Nairobi for an assessment of the country’s economic and financial policies.
The IMF has acknowledged the possibility of a new funding programme with Kenya after it axed a previous arrangement in March this year when Kenya failed to meet conditionalities, including missed revenue targets.
Latest Treasury data shows that Kenya has not projected any new funding from the IMF up to at least June 2030.
IMF mission chief for Kenya Haimanot Teferra is leading the team visiting Nairobi from Thursday up to October 9 to initiate discussions.
The team is expected to meet with key officials, including the Central Bank of Kenya Governor Kamau Thugge and Treasury Cabinet Secretary John Mbadi.
“At the request of Kenyan authorities, an IMF staff meeting will begin initial discussions in the coming days on a possible fund-supported programme,” said Ms Teferra.
“The IMF remains committed to supporting Kenya in its efforts to maintain macroeconomic stability, safeguard debt sustainability, strengthen governance, and promote inclusive and sustainable growth for the benefit of the Kenyan people. We look forward to constructive engagement with the authorities and other stakeholders during our visit to Nairobi.”
This latest meetings are expected to happen alongside Article IV consultations -- annual discussions between the IMF and member countries to review their economic and financial policies.
CBK Governor Kamau Thugge previously indicated that the government would be pushing for a successor programme to the April 2021 Extended Credit Facility (ECF) and Extended Fund Facility (EFF), which were terminated in March this year following deadly anti-tax protests that peaked in June 2024.
The Finance Bill, 2024 had proposed some of the most aggressive tax increments the country had ever seen, sparking protests that rocked Nairobi and several other counties. This resulted in the deaths of at least 16 people and the injuries of hundreds of others.
The government shelved the unpopular Bill, but some of its proposals later became law in amendments passed by Parliament in December 2024.
Kenya missed out on Sh110 billion financing from the last tranche of the IMF’s three-year programme after the breach of conditionalities, including missed revenue targets.
The ECF facility provides medium-term financial assistance to low-income countries with protracted balance of payments problems, while EFF provides financial assistance to countries facing serious medium-term balance of payment problems because of structural weaknesses that require time to address.
“We are expecting an IMF team to come in September to start discussions on the Article IV consultations. At that time, we will also engage them with regard to a new arrangement,” Dr Thugge said in June.
The feasibility of a funded programme remains in doubt, with Kenya having access to almost all its quota or share of IMF resources.
Kenya could only tap a maximum of Sh64.8 billion from the multilateral lender based on its cumulative access through March 31, 2025.
Mr Mbadi said the omission of projected funding from the IMF was a deliberate move to manage expectations even as the country pushes for a successor programme.
He noted in a previous interview that the fund should not be viewed as a primary source of external financing support for Kenya.
“I want Kenyans to understand that the IMF’s primary responsibility is not to fund the budget of member countries and is instead for balance of payments support. Going forward, we are trying to minimise our focus on the IMF, but it doesn’t mean that we are stopping our engagements,” he said.
