An International Monetary Fund (IMF) staff team wrapped up its visit to Nairobi on March 4 after assessing Kenya’s macroeconomic outlook and reviewing ongoing discussions around a potential new financing programme with the Fund.
The mission centred on fiscal policy, macroeconomic vulnerabilities, and key reform priorities.
Kenya joined a combined Extended Fund Facility and Extended Credit Facility arrangement in 2021 valued at roughly US$3.6 billion (about KSh465.8 billion). Around US$3.12 billion (approximately KSh403.7 billion) had been released before the programme’s final review stalled in 2025.
Negotiations are now entering a decisive stage as Kenya attempts to restore fiscal credibility while coping with domestic political pressures, budget constraints, and wider geopolitical disruptions.
According to Haimanot Teferra, who led the IMF mission, the team held consultations with Kenyan authorities on recent macroeconomic developments, policy measures, and emerging risks, including possible economic spillovers from tensions in the Middle East.
Teferra noted that discussions underscored the importance of tightening fiscal discipline, rebuilding fiscal credibility, and strengthening resilience against external shocks. He added that these efforts should be reinforced through stronger governance frameworks and improved efficiency within the public sector.
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Kenya’s financial exposure to the IMF remains substantial. Outstanding IMF credit currently stands at nearly SDR 2.8 billion, equivalent to about US$3.7 billion (roughly KSh478.8 billion). At the same time, public debt remains elevated at close to 65 percent of GDP, keeping the country’s fiscal stance under close watch from global lenders and investors.
Fiscal consolidation had been a core element of the earlier IMF programme. However, progress slowed after political pressure led to the withdrawal of key tax proposals in the Finance Bill 2024, undermining projected revenues and delaying completion of the final programme review. Since then, the government has sought alternative financing through avenues such as Eurobond issuance and increased domestic borrowing, while maintaining dialogue with the IMF on a possible successor programme.
Further technical consultations are expected to continue during the IMF–World Bank Spring Meetings scheduled for April 2026.
