The International Monetary Fund (IMF) has confirmed that its staff visit to Kenya this week focused on assessing the country’s economic situation and exploring possible reforms that could lay the groundwork for a new financial programme.
In a statement released on Friday, the IMF said the discussions with Kenyan authorities reviewed the latest macroeconomic developments and centered on “measures to enhance fiscal policy credibility, ensure sustainability of public finances and debt, and minimize fiscal, financial, and external sector risks.”
The Fund added that talks would continue on the sidelines of the upcoming IMF Annual Meetings.
Kenya’s previous $3.6 billion Extended Fund Facility and Extended Credit Facility programme with the IMF expired earlier this year. Government officials have since signaled interest in negotiating a new arrangement that would include a lending component to help the country meet upcoming debt obligations.
Several financial analysts have argued that a new IMF programme would be vital for maintaining investor confidence and stabilizing Kenya’s external financing position amid rising global interest rates and a heavy repayment schedule for eurobonds and other external debts.
Kenya has faced mounting fiscal pressures in recent years, with a widening budget deficit and high debt servicing costs weighing on public finances.
The IMF’s focus on fiscal credibility and debt sustainability suggests that a potential new agreement could include stronger measures to manage expenditure, boost revenue collection, and improve transparency in public debt management.
The ongoing talks come as the government of President William Ruto continues to implement a series of tax and expenditure reforms aimed at easing fiscal strain and restoring macroeconomic stability.
Source: Reuters
Written By Rodney Mbua
