The government is preparing to reopen negotiations with the International Monetary Fund (IMF) as it seeks a fresh financing programme to help address mounting debt pressures.
The National Treasury, under Cabinet Secretary John Mbadi, is expected to hold new talks with the IMF following the lender’s decision to cancel a programme agreed in 2021 after Kenya failed to meet several key conditions. IMF staff are scheduled to return to Nairobi in February, months after the multilateral institution terminated the multi-year arrangement in March 2025.
Treasury officials say discussions are aimed at securing a new funded programme that would provide a credible framework for fiscal reforms and support efforts to restore debt sustainability. Raphael Owino, director general of the Public Debt Management Office, confirmed that IMF officials are likely to be back in the country before the end of February 2026 to continue the talks, although no explanation was given for the postponement of an earlier visit planned for January.
While the government hopes to unlock additional IMF financing, reports indicate that any potential funding has not yet been factored into future budgets, suggesting caution over the outcome of the negotiations.
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The IMF previously walked away from the 2021 agreement, withholding about USD 850.9 million (approximately KSh 109.7 billion), after Kenya failed to comply with a number of agreed targets. These included restructuring Kenya Airways, tightening controls on the use of the fuel stabilisation fund, containing expenditure, boosting tax revenues and settling outstanding payments to suppliers. Overall, the country fell short on 11 of the 16 conditions set under the programme.
Kenya is also pursuing support from the World Bank’s Development Policy Operations, but progress has similarly stalled after it failed to meet several prerequisites, including reforms on e-procurement, faster approval of county additional allocations and further rollout of the Treasury Single Account.
During its most recent assessment mission between late September and early October 2025, the IMF reviewed Kenya’s economic outlook and held discussions on policy priorities, including the need for a new support programme. The fund reaffirmed its long-term engagement with Kenya despite the setbacks.
Kenya’s public debt stood at KSh 12.25 trillion as of November 2025, according to the Central Bank of Kenya. In the absence of fresh external funding, the Treasury plans to raise about KSh 906 billion from the domestic market in the 2026/2027 financial year, even as Moody’s recently upgraded Kenya’s credit rating to B3.
