Kenya Turns To IMF For New Bailout As Ksh103.4 Billion Loan Abandoned
Kenya’s government has returned to the International Monetary Fund (IMF) for a fresh funding scheme.
This comes after they agreed not to proceed with a final review of an existing facility, which would have yielded $800 million, or around Ksh103.4 billion.
Kenya requested a new finance program from the IMF after opting not to proceed with a final review of an existing facility that would have enabled the Ksh103.4 billion transaction.
According to Bloomberg, the current $3.6 billion (Ksh466.2 billion) four-year program negotiated in response to the COVID-19 outbreak that devastated Kenya and other economies expires on April 1.
If the IMF does not approve the revised request in time, Kenya will face a budget-financing shortfall as the facility expires without a final disbursement.
Kenya requested a new funding program from the International Monetary Fund after agreeing not to proceed with a final review of an existing facility that would have unlocked $800 million https://t.co/h8xdJZo10T
— Bloomberg Africa (@BloombergAfrica) March 17, 2025
“The Kenyan authorities and IMF staff have reached an understanding that the ninth review under the current extended fund facility and extended credit facility programs will not proceed,” IMF shared in a statement following a staff visit.
“The IMF has received a formal request for a new program from the Kenyan authorities and will engage with them going forward,” it added.
However, fiscal experts are closely monitoring Kenya’s return to the IMF after the country failed to meet key goals under the current program.
Kenya has failed to meet certain goals, including reducing its fiscal deficit and increasing revenue-raising efforts.
Attempts by the government to impose higher taxes and broaden the tax bracket in the previous two budgets sparked violent protests by Generation Zs last year.
Last month, the government repurchased some of its Eurobonds and issued longer-term securities.
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They also stated that they would spend the remaining $950 million (Ksh466.2 billion) to repay pricey syndicated loans outstanding to the Trade and Development Bank.
In addition, the government expects the entire disbursement of a $1.5 billion (Ksh194.25 billion) loan from the United Arab Emirates, which was originally scheduled to be paid in two tranches.
However, the UAE loan is expected to be hampered by misgivings raised by Treasury CS John Mbadi, who claims that the loan may expose Kenya to foreign exchange risks.
Mbadi also stated that the amount exceeded Kenya’s commercial borrowing ceiling for the current fiscal year, as the government intends to reduce the proportion of foreign loans to around 18% of the total due to lower IMF receipts.
Kenya Turns To IMF For New Bailout As Ksh103.4 Billion Loan Abandoned
