Kenya Seeks New IMF Lending Programme Amid Debt Challenges

Kenya and the IMF are discussing a new lending program after halting the current $3.6 billion loan review. The country needs continued support amidst high debt-servicing costs. A formal request for a new program has been made, with the current program ending soon.

Nairobi and the International Monetary Fund (IMF) are negotiating a new lending program, abandoning a planned review of their existing $3.6 billion arrangement. Kenya, grappling with surging debt costs from a decade-long borrowing spree, needs this continued assistance to stabilize its economic trajectory.

IMF mission chief Haimanot Teferra announced the mutual decision to forego the ninth review of the Extended Fund Facility and the Extended Credit Facility during a recent visit to Kenya's capital city. The IMF confirmed receiving a formal request from Kenya for a fresh program, as the current arrangement is set to expire next month.

According to Finance Minister John Mbadi, Kenya is actively seeking alternative financing sources, including enhancing revenue collection, to meet its growing expenditure and manage its heavy debt burden, which stands at 65.7% of GDP as of June last year.

(With inputs from agencies.)