Kenya Cancels Ninth Review and Seeks New Loan Program from IMF

Kenya and the IMF have agreed to cancel the ninth review of the loan program under the EFF and ECF programs. This decision comes after discussions held during an IMF staff mission to Nairobi. A formal request for a new program has been made by Kenyan authorities to address ongoing economic challenges.

Recently, the Republic of Kenya and the International Monetary Fund (IMF) have mutually decided to cancel the ninth review of the ongoing loan program. This revision was part of the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) programs from the IMF. The announcement follows the conclusion of an IMF staff mission visit to Nairobi from March 6 to March 14, 2025, led by Haimanot Teferra.

During the visit, the IMF staff engaged with various Kenyan authorities to evaluate recent economic developments, as well as to deliberate on the macroeconomic outlook. Ultimately, both parties reached a consensus to halt the ninth review under the existing EFF and ECF programs, with a formal request for a new program having been officially submitted by the Kenyan government.

The IMF team held discussions with key government officials, including President William Ruto and Cabinet Secretary for National Treasury, Mbadi Ng’ongo, among others. The shifting strategy regarding the ninth review arises against a backdrop of ongoing discourse regarding Kenya’s fiscal policies and economic hurdles, particularly concerning debt management and revenue generation.

As of now, the EFF and ECF programs, approved on April 2, 2021, provided Kenya a total initial access of SDR 1.655 billion (approximately US$2.34 billion). Presently, the overall financial commitment to Kenya under these arrangements has reached SDR 2.714 billion, part of which has already been disbursed since 2021. In addition, Kenya has also secured SDR 407.1 million under the Resilience and Sustainability Facility (RSF) since 2023.

In summary, the cancellation of the ninth review of Kenya’s loan program with the IMF reflects a strategic pivot in response to the country’s ongoing economic challenges. The move signifies a collaborative effort between the IMF and Kenyan authorities, leading towards the initiation of a new program aimed at addressing fiscal sustainability and revenue enhancement. The evolving relationship between Kenya and the IMF will be pivotal in shaping the nation’s economic policy adjustments moving forward.

Original Source: www.asaaseradio.com