IMF Delegation Arrives in Kenya for Talks on Possible Support Programme

Nairobi, Kenya — September 25, 2025

An International Monetary Fund (IMF) team, led by mission chief Haimanot Teferra, is in Nairobi from September 25 to October 9 for discussions with Kenyan authorities on a new Fund-supported programme. The visit follows a formal request from the government. 

The Latest

• The IMF mission will begin initial negotiations with Kenyan officials, assessing economic, fiscal, and governance frameworks to consider whether to support Kenya under a new agreement. 

• Central Bank Governor Kamau Thugge has publicly indicated that Kenya is seeking a funded programme (i.e. one with disbursements) to help manage its fiscal challenges and external debt obligations. 

• Earlier this year, Kenya and the IMF did not complete the final review of the 2021-2025 facility (worth about $3.6 billion), which resulted in withholding the final disbursement of around $800 million. 

• The IMF has said it remains committed to helping Kenya maintain macroeconomic stability, debt sustainability, and governance improvements during this mission. 

Context in Brief

• Under the existing Extended Fund Facility / Extended Credit Facility programme signed in 2021, Kenya was expected to meet strict fiscal deficit reduction, revenue collection, and structural reform benchmarks. 

• Political resistance to tax hikes led to nationwide protests, forcing the government to abandon certain revenue measures—undermining compliance with IMF conditions. 

• The government formally requested to negotiate a successor programme earlier in 2025. 

• Kenya’s debt to GDP ratio and debt servicing costs have been rising, putting increased pressure on public finances. 

Law, Policy & Process

• Any new IMF programme must be reviewed by IMF staff, then approved by the IMF’s Executive Board.

• Kenya must submit macroeconomic frameworks—budgets, revenue forecasts, policy commitments—for scrutiny.

• Structural reforms (e.g. governance, audit, public financial management) are often tied into disbursement tranches.

• The arrangement must comply with Kenya’s Constitution (e.g. obligations on debt, oversight, parliamentary review) and public finance laws (e.g. Public Finance Management Act).

Voices & Stakeholders

• IMF / Teferra: “At the request of the Kenyan authorities, an IMF staff team will begin initial discussions… We look forward to constructive engagement.” 

• Kenyan Authorities: Thugge and others have affirmed the desire for a funded facility that can help manage external obligations. 

• Analysts / Economists: Many see the visit as critical—Kenya needs external anchor support to reassure markets and creditors.

Evidence & Data Box

• Mission dates: September 25 – October 9, 2025 

• Previous programme size: ~US$3.6 billion, with $800 million withheld final disbursement 

• Debt metrics: Kenya’s debt-to-GDP ratio has crossed sustainable thresholds in recent reports 

Risks, Implications & Scenarios

Risks

• IMF may demand stricter austerity or reforms that provoke public backlash or unrest.

• If benchmarks are missed, the programme could stall or funds withheld.

• Loss of sovereignty concerns: critics may argue Kenya’s policies will be overly influenced by external actors.

Implications

• A successful programme would help Kenya access much-needed external financing, manage maturing debt, and stabilize investor confidence.

• Conversely, a failed negotiation could worsen fiscal pressures and raise borrowing costs.

Possible Scenarios

1. Full funded programme approved: Kenya secures disbursements tied to reform tranches.

2. Standby / precautionary programme: IMF support contingent on Kenya meeting stricter conditions.

3. No agreement: Kenya continues to struggle with financing gaps, relying more on domestic borrowing and off-budget measures.

What We Don’t Know Yet

• The size and terms (interest rate, disbursement schedule) of a potential programme.

• Which sectors and reforms will be prioritized (e.g. health, debt management, tax policy).

• How much domestic political consensus there is for the required adjustments.

• Whether any hidden conditionalities will be negotiated behind the scenes.

Timeline

• March 2025: Kenya and IMF fail to complete final review; $800 million disbursement withheld. 

• March 2025: Kenya formally applies for a new programme, incorporating unutilized funds. 

• September 25 – October 9, 2025: IMF team in Kenya for talks. 

What to Watch

• IMF’s mission statement / concluding report and public communique at the end of visit.

• Revisions in Kenya’s 2026 budget proposals, reflecting IMF engagement.

• Market reactions (bonds, credit ratings) in response to negotiation progress.

• Which reforms the government signals willingness to adopt on revenue, expenditure, and governance fronts.