IMF Flies in for New Deal with Nairobi

The International Monetary Fund(IMF) staff will visit Kenya from Wednesday 25^th 2025 to October 9^th 2025 to begin talks with the Kenya Kwanza Administration on the possibility of signing a new economic package and a lending programme.

Kenya’s $3.6 billion programme with the IMF expired in April 2025. Dr William Ruto’s administration has already expressed interest in getting a new deal with the Fund to run its huge spending.

“An IMF staff team will begin initial discussions in the coming days on a possible Fund-supported programme,” Haimanot Teferra, the IMF’s mission chief for Kenya, said in a statement.

Kenya is desperate to clinch a new loan package from the IMF to deal with a ballooning external debt repayment bill and restart a stagnant economic engine.

In March 2025, Kenya and the IMF abandoned the final review of its last programme, with the Kenya Kwanza government not receiving the final disbursement of some US $800 million.

Kenya had struggled to cut its fiscal deficit and boost revenue collection under the programme, two of the main requirements of the IMF, after it was forced to scrap planned tax hikes following July Gen-Z powered public protests.

Teferra said the IMF remains committed to supporting Kenya in its efforts to maintain macroeconomic stability, safeguard debt sustainability and strengthen governance.

While the Kenya Shilling exchange rate against the US Dollar remains stable, households continue to face harsh economic times, made worse by low purchasing power and high cost of food items.

According to IMF reports, revived market confidence has aided stabilization of the Kenya Shilling, and enabled a faster build-up of foreign exchange reserves.

However, large revenue shortfalls in FY2023/24 and pushback against revenue measures owing to governance concerns pose a challenge to the ongoing fiscal consolidation efforts.

The Kenyan authorities face a difficult balancing act of boosting domestic revenues to protect critical spending in priority areas while meeting heavy debt service obligations.