By Enyichukwu Enemanna
Kenya is seeking a new funding arrangement with the International Monetary Fund (IMF), as talks are expected to begin in Nairobi in the coming weeks when the officials of the global lender will visit the African country.
Central Bank of Kenya (CBK) Governor Kamau Thugge said on Wednesday that discussions with the IMF are ongoing as Kenya explores the possibility of entering another Fund-supported programme.
“As we have said in the past, we have had discussions with the IMF on trying to reach an agreement about a Fund-supported programme. We continue to have those discussions,” Thugge said at the post-Monetary Policy Committee briefing in the capital, Nairobi.
He added that an IMF mission is expected in the country soon to commence Article IV consultations, which review a country’s economic performance and policy direction.
“We expect an IMF team to come shortly to Nairobi to initiate the Article IV discussions. In the context of those discussions, we will have further consultations about our relations and in particular about having a Fund-supported programme,” Thugge stated.
It is not clear how much financing Kenya could seek under a new programme, as the government plans to increase borrowing to fund its spending plans.
Treasury’s draft Budget and Economic Outlook Paper projects that Kenya will borrow Ksh1.321 trillion in the 2027/28 financial year to bridge the budget deficit.
Of this amount, Ksh1.1 trillion is expected to come from the domestic market, while Ksh236 billion will be sourced from external lenders.
The borrowing plan is part of a proposed Ksh5.323 trillion budget, indicating the government’s continued need for financing amid rising expenditure pressures.
Kenya’s relationship with the IMF has been mixed in recent months after negotiations for a new programme slowed due to governance and corruption concerns raised by the lender.
