Kenya is set to negotiate a new lending program with the International Monetary Fund (IMF) as its current $3.6 billion facility expires on April 1.
Haimanot Teferra, the IMF's mission chief, confirmed in a statement that Kenya had formally requested a new program. Both parties agreed not to proceed with the ninth review of the existing Extended Fund Facility and Extended Credit Facility programs, leaving a potential $480 million disbursement off the table.
The decision comes as Kenya faces a significant budget-financing gap amid mounting debt repayments. The current IMF program, launched post-COVID-19, was designed to support economic recovery but has struggled to address the fiscal pressures caused by increased government spending in recent years.
While details of the new deal remain undisclosed, the IMF mentioned it could involve either a lending or non-lending arrangement. A separate Resilience and Sustainability Facility, approved in July 2023, has already disbursed $180.4 million of its $541.3 million allocation, though its future role remains unclear.