Kenya and IMF Seek Fresh Financial Path Amid Debt Challenges

Kenya and the IMF are negotiating a new lending program after discontinuing the current one, driven by Kenya's substantial debt upkeep costs. The existing program was set to end, with projections of a new plan to stabilize the economy and manage debt sustainably.

Kenya is in talks with the International Monetary Fund (IMF) for a new lending program, terminating the existing arrangement as the nation grapples with surging debt costs following significant borrowing. The new program is crucial for the East African country, aiming to meet rising debt obligations resulting from previous heavy government spending.

IMF's mission chief, Haimanot Teferra, confirmed Kenya's formal request for a new financial program during a visit to Nairobi. It was agreed to halt the ninth review under the ongoing Extended Fund Facility and Extended Credit Facility, expiring next month, valued at $3.6 billion.

The need for a revamped program comes amid declining Kenyan dollar bonds and potential financing setbacks, though prospects remain hopeful with potential funds from the United Arab Emirates and a Eurobond issue. The initial program faced hurdles during implementation, including protests and new borrowing disputes.

(With inputs from agencies.)