Kenya has abruptly reversed course by requesting the International Monetary Fund (IMF) to consider releasing Ksh103.77 billion in funds it planned to leave on the table as part of a new programme just days after announcing abandoning the final review of its existing $3.6 billion (Ksh467 billion in the current exchange rates) loan arrangement. The move comes as S&P Global Ratings on Monday warned that missed IMF disbursements could delay critical funding from the World Bank and the United Arab Emirates (UAE), raising fresh concerns over the country's debt management strategy. S&P cautioned that Kenya's failure to secure the IMF's final $850 million (Ksh110.25 billion in the current exchange rates) tranche may disrupt anticipated inflows, including an $800 million (Ksh103.77 billion in the current exchange rates) World Bank loan and a $1.5 billion (Ksh194.56 billion in the current exchange rates) UAE facility expected in early 2025. "IMF funding often serves as a catalyst for other official and private flows," S&P said, noting that Nairobi may now rely on costlier domestic borrowing to bridge financing gaps.
The ratings agency also flagged risks to Kenya's debt-servicing costs, which have surged under President William Ruto's administration. National Treasury Cabinet Secretary John Mbadi flanked by other ministry officials during a press briefing on February 13, 2025, at the Treasury Building in Nairobi.
Photo National Treasury Treasury Cabinet Secretary John Mbadi confirmed the new IMF application, insisting that the decision to scrap the ninth review was due to time constraints rather than unmet targets.
Mbadi denied reports of a rift with the IMF, asserting that $800 million in unused funds from the current programme could be rolled into the new arrangement.
