Kenya Seeks New IMF Loan Programme as Public Debt Hits Ksh11.8 Trillion

by Frankline Oduor on Thursday, 11 December 2025 - 8:35 am

Kenyan officials led by Treasury CS John Mbadi, PS Chris Kiptoo, and CBK boss Kamau Thugge during the ongoing IMF/World Bank Annual Meetings in Washington, D.C., on October 13, 2025.

Treasury

The government has announced intentions to secure yet another programme with the International Monetary Fund (IMF) amid the government's intention to address the tightening borrowing space, with the public debt having hit Ksh11.8 trillion.

The developments were confirmed by the Central Bank of Kenya Governor Kamau Thugge during the post-Monetary Policy Committee (MPC) briefing in Nairobi on Wednesday, where he revealed that the IMF staff were expected to visit the country in January to continue discussions with Kenyan authorities over a new support programme.

"We continue to have discussions with the IMF on getting ... a new funded programme. We do expect a staff visit from the IMF sometime in January to continue the discussions," Kamau said.

Kenya's Ksh465 billion (USD3.6 billion) programme with the Washington-based lender expired in April, and officials, including Thugge, have expressed interest in getting a new one that will include a lending component, according to Reuters.

President William Ruto, with a Kenyan delegation, during a meeting with the IMF board in Washington, DC, on December 3, 2025.

PCS

Nevertheless, the negotiations, which have been lagging since April despite various visits by the lender's staff and subsequent engagements with top officials, including President William Ruto, have been delayed by a disagreement on how to classify securitised loans.

Despite the indications of plans to borrow, the government has recently signalled a shift toward securitisation of bonds and divestment of shares in public and state-owned enterprises to help address the tightening fiscal space.

Treasury Cabinet Secretary John Mbadi stated on Wednesday that Kenya can no longer rely on raising taxes or borrowing to finance large infrastructure projects, citing a growing debt burden that now consumes nearly half of all revenue.

Mbadi also emphasised the need to shift commercially viable projects to specialised entities, saying this move is necessary to ease pressure on public finances.

President Ruto has also announced in the past that the government aims to eliminate external borrowing for development projects within 10 to 20 years as part of efforts to address the country’s rising foreign debt.

Additionally, the developments come at a time when Kenya has emerged among the world’s top 10 borrowers from the IMF, with the country ranked seventh globally in terms of outstanding credit.

According to the latest IMF data published on December 4, Kenya’s current outstanding debt to the Fund stands at SDR 2.95 billion, equivalent to approximately Ksh519.8 billion at the prevailing exchange rate.

Kenya now falls behind only six countries globally in IMF debt, with Argentina leading at Ksh7.35 trillion (SDR 41.8 billion), Ukraine Ksh1.82 trillion (SDR 10.3 billion), Ecuador Ksh1.22 trillion (SDR 6.93 billion), Egypt Ksh1.18 trillion (SDR 6.73 billion), Pakistan Ksh1.16 trillion (SDR 6.59 billion) and Côte d’Ivoire Ksh542.7 billion (SDR 3.08 billion).

In Africa, Kenya ranks third after Egypt and Côte d’Ivoire. Other major regional economies include Angola, which owes Ksh468 billion (SDR 2.66 billion); Ghana, Ksh454.8 billion (SDR 2.58 billion); Ethiopia, Ksh280.4 billion (SDR 1.59 billion); and neighbouring Tanzania, Ksh235 billion (SDR 1.33 billion), all of which rank behind Kenya.