Kenya is set to reopen talks with the International Monetary Fund (IMF) as the government looks for new ways to stabilise the economy. Prime Cabinet Secretary Musalia Mudavadi confirmed the move on Thursday in Nairobi.
Government Prepares for Talks
Mudavadi revealed that the National Treasury will send a team to engage the IMF in the coming weeks. He said the goal is to agree on a structured programme that gives Kenya a clear economic pathway.
Kenya’s last four-year IMF programme, worth $3.6 billion (Ksh465 billion), ended in April. However, the country missed out on a final payout of $850 million (Ksh109.9 billion). This was because the government struggled to meet conditions such as cutting the budget deficit and raising more tax revenue.
Challenges Ahead
Analysts warn that fresh negotiations may face hurdles. Kenya may first need to repay part of its current debt before securing new financing. This could delay a full agreement until 2027.
In the meantime, the government is exploring other options. These include selling diaspora bonds, privatising state assets, and refinancing existing loans. Such measures aim to ease immediate pressure on public finances.
FATF Grey List Concerns
Alongside debt talks, Kenya is also working to exit the Financial Action Task Force (FATF) grey list. The country was added for weaknesses in fighting money laundering and terror financing.
Mudavadi said Treasury officials are working with regulators and global partners to meet the compliance standards. In June, the European Commission listed Kenya among high-risk countries, a move that hurt investor confidence.
Looking Ahead
Talks with the IMF are expected to begin within two months. If successful, they could help Kenya manage its debt, restore investor trust, and provide much-needed stability for the economy.
