Kenya and the IMF have agreed to cancel the 9th review of their loan program. Following an IMF mission to Nairobi, a formal request for a new program has been initiated by Kenya. The discussions centered on addressing fiscal challenges, including debt sustainability and revenue generation. Overall financial commitments from the IMF to Kenya have surpassed SDR 2.7 billion since 2021.
The government of Kenya and the International Monetary Fund (IMF) have jointly decided to cancel the 9th review of the loan program associated with the Extended Fund Facility (EFF) and Extended Credit Facility (ECF). This decision aligns with assessments conducted by the IMF team, which visited Nairobi from March 6 to March 14, 2025, to evaluate Kenya’s economic conditions and future outlook.
During the IMF mission, high-level discussions took place with significant Kenyan officials, including President William Ruto and National Treasury Cabinet Secretary Mbadi Ng’ongo. The collaborative engagement led to a mutual understanding that the previous review would not proceed, and the Kenyan authorities formally requested a new program to be negotiated with the IMF for ongoing support.
The optimization of Kenya’s financial strategy is urgent, given sustained fiscal and economic challenges. Issues such as debt sustainability, revenue generation, and external financing challenges are crucial focal points as both parties seek to establish a robust framework for future funding.
To put the context into perspective, the IMF had approved the EFF and ECF frameworks for Kenya on April 2, 2021, facilitating access to SDR 1.655 billion ($2.34 billion). The cumulative commitment under these arrangements totals SDR 2.714 billion (approximately KSh 465.76 billion), with SDR 2.343 billion (around KSh 402.54 billion) already allocated since inception. Additionally, Kenya was granted SDR 407.1 million (about KSh 69.8 billion) through the Resilience and Sustainability Facility in 2023.
In summary, the cancellation of the 9th review by Kenya and the IMF signals a proactive approach towards addressing the country’s economic challenges. With a focus on negotiating a new program, both parties aim to enhance financial stability amidst significant fiscal pressures. The previously approved funding mechanisms illustrate a commitment to supporting Kenya’s economic recovery and sustainability.
Original Source: www.asaaseradio.com
