Kenya is in talks with the International Monetary Fund (IMF) for a new financing program that will incorporate unused funding from the existing arrangement, Treasury Cabinet Secretary John Mbadi announced on Monday.
This follows a pause in discussions last week when both sides agreed to halt the ninth and final review of the existing $3.6 billion loan program.
Mbadi attributed the decision to pause the review to time constraints, refuting reports that the government had missed IMF targets in the existing program.
Approximately $800 million was undisbursed from the 2021 loan program, which consisted of an extended fund facility, extended credit facility, and Resilience and Sustainability Facility.
Bloomberg, citing undisclosed sources, reported last week that the East African country abandoned the ninth review after missing key IMF targets, a claim refuted by Mbadi.
“It is not correct that there is any problem with the IMF. That narrative people are driving is not accurate,” Mbadi noted.
Kenya continues to face difficulties in boosting revenue collection and reducing its fiscal deficit, two of the key IMF requirements. The country failed to meet some targets during the 7th and 8th reviews.
On Monday, S&P Global Ratings warned that Kenya’s failure to complete the final IMF review could delay access to other external financing sources.
The country’s debt continues to rise despite the government’s vow to tame appetite for borrowing. As of June 2024, the total public debt amount to Kshs 10.6 trillion, equivalent to 65.7% of the country’s GDP.
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