Kenya and the International Monetary Fund (IMF) have jointly decided to pause the ninth review of the country’s $3.6 billion loan program, paving the way for discussions on a fresh lending arrangement.
This move comes at a time when Kenya is grappling with soaring debt-servicing costs, a consequence of heavy borrowing over the past decade.
Haimanot Teferra, the IMF mission chief, confirmed that both sides have agreed to halt the ninth review of the Extended Fund Facility and Extended Credit Facility programs.
In response, the Kenyan government has formally requested a new financial program aimed at addressing the country’s growing fiscal challenges.
Kenya’s economy is currently under intense pressure, struggling to reconcile escalating government spending with ballooning debt repayments.
Protests against tax hikes and ongoing disagreements over new borrowing from the United Arab Emirates have further complicated the implementation of the existing program, which is set to expire next month.
With a debt-to-GDP ratio of 65.7% as of June—significantly higher than the sustainable threshold of 55%—Kenya is exploring alternative financing options, such as strengthening revenue collection efforts.
The IMF’s ongoing partnership is seen as crucial for Kenya as it seeks to regain fiscal stability and navigate its complex economic landscape.
