Despite ongoing efforts to reduce its debt, the Kenyan government is seeking additional loans and is turning to the International Monetary Fund (IMF) for further support. The East African nation expects to secure more funding from the IMF by the end of the year.
Kamau Thugge, the governor of the Central Bank of Kenya, indicated that discussions are underway to combine the seventh and eighth assessments of the IMF’s support program. He stated at a recent press conference that these talks are nearing completion.
“We are in the final stages of reaching an agreement with the IMF,” Thugge confirmed. “The fiscal framework has been established.”
To bolster Kenya’s resilience against short-term economic shocks, the central bank has started to accumulate US dollars in the foreign exchange market. Thugge reiterated that the bank intervenes in the currency market to mitigate instability but does not have a specific target for the shilling’s value.
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Previously, Kenya requested an in-depth analysis from the IMF regarding how corruption and mismanagement are draining its resources.
Earlier in June, the Kenyan government reached a staff-level agreement with the IMF concerning the seventh assessment of a US$3.6 billion program. However, the Ruto administration was forced to abandon plans for tax hikes and implement budget cuts in response to widespread protests that escalated into violence. Consequently, the review has yet to receive approval from the IMF’s executive board.
During these protests, demonstrators called on the IMF to withhold further loans to Kenya, arguing that previous funds had been mismanaged or lost to corruption, leaving little accountability. This petition was presented at the IMF headquarters in Washington, D.C., by Kenyans residing in the United States.
