Central Bank of Kenya (CBK) Governor Kamau Thugge has explained why Kenya cannot yet confirm when it will secure a new lending programme from the International Monetary Fund (IMF), saying the start date will depend on whether the two sides agree on the structure and priorities of the proposed deal.
Speaking to Bloomberg on Thursday, October 15, during the IMF and World Bank Annual Meetings in Bangkok, Thailand, Thugge said the government was still uncertain when it would reach the next programme.
“We have to see their thinking, our thinking, and what the programme would look like; all those would be determinants of when the programme can start,” Thugge told Bloomberg.
CBK Governor Explains Why Kenya Cannot Confirm When It Will Secure a New IMF Loan
Thugge said Kenya preferred a funded IMF arrangement because concessional financing could help the government reduce its reliance on more expensive domestic borrowing.
However, he said Kenya did not face an immediate balance-of-payments need, pointing to foreign exchange reserves equivalent to about six months of imports and a stable currency.
“We don’t have a balance of payments need,” he said.
His remarks come as the National Treasury seeks additional funding to cover budget shortfalls, while the government faces rising public debt and continues discussions with international lenders.
Kenya is seeking a new IMF lending arrangement following the early end of its previous $3.6 billion programme, worth about KSh467 billion, in April 2025.
The programme, planned to run for four years, ended with about $850 million remaining undisbursed after Kenya fell short of key targets, including reducing the budget deficit and increasing tax revenue.
The government requested a successor programme in March 2025 after abandoning the ninth review of the previous arrangement.
Further discussions took place during IMF missions to Nairobi in September and October 2025 and February and March 2026. However, the talks did not result in an agreement on a new programme.
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IMF Mission Expected in December as Treasury Seeks Alternative Funding
The National Treasury expects an IMF mission to visit Nairobi in early December for Article IV consultations.
The consultations will assess Kenya’s economic performance, policies and economic outlook. The visit is also expected to open discussions on a successor programme.
However, the Article IV review does not automatically mean Kenya will secure a new loan. Any new lending arrangement will depend on further discussions and an agreement between Kenya and the IMF on the programme’s terms and economic priorities.
As talks on a new IMF programme continue, the government is pursuing funding from other international lenders to support its budget.
A proposed KSh127 billion financing package from the World Bank and the African Development Bank (AfDB) is expected to help meet the government’s funding needs.
The package comprises approximately KSh94 billion from the World Bank and about KSh34 billion from the AfDB.
Treasury Public Debt Management Director General Raphael Owino said Kenya would pursue the World Bank funding through a Development Policy Operation, with discussions focusing on the reforms Kenya would need to undertake to secure the funds.
The government has also rolled over maturing Eurobonds to spread out its repayment obligations as it manages borrowing costs and financing needs.
Also Read: CBK Reserves Fall as Dollar Extends Winning Streak Against Shilling
Kenya Prepares to Borrow $5.4 Billion
Thugge said Kenya has completed selecting the banks that will arrange its external borrowing programme of $5.4 billion through June 2027.
The country could move quickly to international markets, although recent market volatility could affect the timing and cost of borrowing.
According to Thugge, yields on Kenyan Eurobonds had risen by as much as 100 basis points since the beginning of September, reflecting higher borrowing costs as investors demand greater returns on government debt.
Government borrowing is projected to increase by about KSh1.145 trillion, or about 5.5 per cent of gross domestic product (GDP), in the 2026/2027 financial year.
The increase is projected to reach KSh1.3529 trillion, or about 5.9 per cent of GDP, in the 2027/2028 financial year.
The IMF has assessed Kenya as facing a high risk of debt distress, limiting the government’s room to increase borrowing without adding to pressure on public finances.
Public opposition and legal challenges have also complicated efforts to raise more revenue, making it difficult for the government to rely solely on higher taxes to finance its spending.
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