By Enyichukwu Enemanna
Kenya has opened talks with the International Monetary Fund (IMF) to explore fresh borrowing options as both sides agreed to step down a ninth review of the outstanding $3.6 billion loan.
Faced with a high inflation rate, Kenya needs continued support to keep its economy on track after a decade-long borrowing spree pushed up debt servicing costs.
“The Kenyan authorities and IMF staff have reached an understanding that the ninth review under the current Extended Fund Facility and Extended Credit Facility programmes will not proceed,” Haimanot Teferra, the IMF’s mission chief, said in a statement issued at the end of a visit to Nairobi, the Kenyan capital.
The IMF has received a formal request for a new programme from the Kenyan government, she added.
The current programme, which began in April 2021, is due to expire next month.
Its implementation has, however, been seriously affected by deadly anti-tax hike protests last year and a row over new borrowing from the United Arab Emirates.
The government will be seeking a financing programme, Finance Minister John Mbadi told reporters last month.
Under the current borrowing programme, the IMF approved $3.12 billion for disbursement to Kenya last October, the global lender said.
Following last year’s failed tax hike plan, which triggered deadly protests, Kenya’s government has been scrambling to secure new financing sources to meet growing expenditure needs and high debt servicing costs.
Kenya’s total debt-to-GDP stood at 65.7% as of June last year, finance ministry data showed well above the 55% level considered a sustainable threshold.
Last year, a wave of nationwide protests forced President William Ruto to withdraw his Finance Bill, which was aimed at raising taxes.
