The disbursement of the IMF funds was initially delayed due to the withdrawal of the Finance Bill 2024 earlier this year, following protests from the youth, known as Gen Z, who opposed the proposed tax measures deemed too burdensome. The National Treasury is now working to reintroduce certain revenue-raising measures from the bill, aiming to generate Ksh 174 billion, which is lower than the original Ksh 346 billion targeted by the bill’s initial provisions
Kenya has successfully secured a Ksh 26 billion (US$200 million) loan from the African Development Bank (AfDB) and is currently in negotiations with the World Bank for an additional Ksh 97 billion (US$750 million), according to a senior National Treasury official. Raphael Owino, the Director-General of the Ministry of Finance’s Public Debt Management Office, revealed that the recent approval of Kenya’s seventh and eighth reviews by the International Monetary Fund (IMF) played a crucial role in paving the way for discussions with other international lenders.
Owino told Reuters that the IMF’s backing, which unlocked a Ksh 78.5 billion (US$606 million) loan tranche, has positively influenced the country’s dealings with the World Bank. “The World Bank is coming on board, riding on the back of IMF receipts,” Owino explained. “The AfDB is already on board.”
These reviews were part of Kenya’s extended agreement with the IMF under the Extended Fund Facility (EFF) and the Extended Credit Facility (ECF), as well as a recent arrangement under the Resilience and Sustainability Facility (RSF) approved in July 2023. These agreements were designed to help the country manage its public finances and economic stability.
The disbursement of the IMF funds was initially delayed due to the withdrawal of the Finance Bill 2024 earlier this year, following protests from the youth, known as Gen Z, who opposed the proposed tax measures deemed too burdensome. The National Treasury is now working to reintroduce certain revenue-raising measures from the bill, aiming to generate Ksh 174 billion, which is lower than the original Ksh 346 billion targeted by the bill’s initial provisions.
The new loans from the AfDB and World Bank come as Kenya looks to balance its budget and continue funding critical development projects and public services. However, these developments also signal a shift away from an earlier plan to seek Ksh 194.1 billion from the United Arab Emirates (UAE), a move that the IMF had cautioned could deepen Kenya’s debt burden if the terms were unfavourable.
