Kenya is set to push for a new programme with the International Monetary Fund (IMF) when a delegation from the multilateral lender visits the country in September.
Central Bank of Kenya (CBK) Governor Kamau Thugge said that the government will take advantage of the IMF’s regular health check of member countries to push for a successor programme following the termination of the previous arrangement in March.
Kenya wrote to the IMF in the same month requesting a new programme despite missing key targets in the previous arrangement, including revenue expectations.
“We are expecting an IMF team to come in September to start discussions on the Article IV consultation. At that time, we will also engage them with regards to a new arrangement,” Dr Thugge told a media briefing on Wednesday.
The premature end of the previous programme saw Kenya miss out on Sh110 billion in financing after the breach of conditions.
The terminated IMF’s extended credit facility (ECF) and extended fund facility (EFF) programme for Kenya began in April 2021. Its implementation, however, was hampered by deadly anti-tax increase protests last year and a dispute over new borrowing from the United Arab Emirates.
Amid pressure from debt service obligations and the need to pay for critical expenditures such as climate change adaptation, the government was scrambling to secure new sources of financing, including trying to boost domestic revenue collection.
The ECF provides medium-term financial assistance to low-income countries with protracted balance of payments problems, while the EFF provides financial assistance to countries facing serious medium-term balance of payments problems because of structural weaknesses that require time to address.
IMF Article IV consultations are discussions that focus on the exchange rate, monetary, fiscal, and financial policies as well as structural reforms.
The discussions also extend to developments in other areas that are critical for economic and financial stability, such as climate change or digitisation.
IMF staff typically meet with members of the legislature, representatives from businesses, labour unions, and civil society.
“These are comprehensive discussions with a broad array of groups that lead to better evaluations of each country’s economic policies and outlook,” the IMF notes.
“After completing their evaluation, IMF staff present a report to the Executive Board for discussion. The board’s views on the report are provided to the country’s authorities, concluding a process known as an Article IV Consultation.”
Most member countries usually have access to the staff report and the accompanying analysis and the views of the IMF executive board.
The National Treasury has omitted funding from the IMF in the national budget up to 2029, following uncertainty on whether the expected fresh talks can unlock new financing.
The Treasury Cabinet Secretary John Mbadi said previously that the omission was deliberating to manage expectations on new financing from the fund even as he insisted that Kenya remains in cordial ties with the multilateral lender.
“We are being very cautious because before you get into an arrangement with the IMF, you can’t start assuming that you will get funding. But it doesn’t mean that we are terminating our programme with the IMF,” he said.
At present, Kenya can only tap a maximum of Sh64.8 billion from the fund under the normal access limit, having almost exhausted the limit on IMF financing access.
Kenya’s total access to IMF financing is capped at six times its quota, which is 3.2 billion special drawing rights (SDRs) or Sh528.9 billion ($4.5 billion).
The SDR is an international reserve asset created by the IMF to supplement the official foreign exchange reserves held by its member countries. The SDR is not a currency.
The country had already accessed Sh518.1 billion ($4 billion) from the IMF (outstanding purchases and loans) as of March 31, 2025.
CS Mbadi says the IMF should not be viewed as a primary source of external financial support for Kenya.
“I want Kenyans to understand that the IMF’s primary responsibility is not to fund the budgets of member countries and is instead for balance of payments support,” he added.
“Going forward, we are trying to minimise our focus on the IMF but it doesn’t mean that we are stopping our engagements.”
