Africa-Press – Kenya. Kenya and the International Monetary Fund (IMF) are set for crunch talks on a new financing programme in Washington, DC, in the United States, it has now been revealed.
Speaking on Wednesday, October 8, Central Bank of Kenya Governor Kamau Thugge revealed that senior government officials from the Treasury will be part of the crucial talks, expressing optimism at a positive outcome.
“The discussions will continue next week when we go to Washington, and of course, we hope to reach an agreement on our funded programme as soon as possible,” Governor Kamau Thugge told a press conference.
Some government officials have said Kenya is eying a deal that includes a lending component. This is crucial after the government failed to raised the Ksh348 billion intended through the Finance Bill of 2024, and consequently opting not to include new taxes this year.
This financial year, the government is seeking Ksh901 billion in loans to fund the 2025/2026 budget. The government indicated about Ksh287.4 billion of this will come from foreign borrowing.
Kenya’s $3.6 billion (Ksh464.9 billion) programme with the IMF expired earlier this year, and some officials have expressed an interest in getting a new one that will include a lending component.
Before the loan expired, Kenya had abandoned the final disbursement of approximately $850 million (Ksh109.9 billion), after struggling to meet key targets, including reducing its budget deficit and increasing tax revenue.
The new loan is expected to facilitate external debt payments, with talks between the two parties set to take place over the next two months.
Even as talks take place, Kenya hopes to attain a favourable loan programme, perhaps one with more achievable conditions, to curtail the risk of defaulting.
The US talks come after a team from the IMF landed in the country in September to hold talks with the government on the new loan.
In a statement on Wednesday, September 24, the team’s leader, Mission Chief of Kenya Haimanot Teferra, confirmed that they will engage in discussions with the government from Thursday, September 25, to Thursday, October 9.
“At the request of the Kenyan authorities, an IMF staff team will begin initial discussions in the coming days on a possible Fund-supported programme. We look forward to constructive engagement with the authorities and other stakeholders during our visit to Nairobi,” Teferra said.
The team was also expected to conduct a deep assessment of the country’s economic and financial policies and a debt sustainability analysis before the lender gives a green light to a new funding agreement.
The IMF’s team visit to Kenya was the second in five months, after a team from the lender was dispatched to the country to conduct a two-week assessment of the country’s anti-graft legal and institutional framework in June.
According to an IMF spokesperson, the assessment was key in ensuring that the government reinforces its anti-graft capacity before it enters into a new funding agreement with the lender.
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