Kenya is negotiating a new lending agreement with the International Monetary Fund (IMF), incorporating unused funds from its existing programme, Finance Minister John Mbadi confirmed on Monday.
Last week, both Kenya and the IMF agreed to cancel the ninth and final review of the current loan programme, which was set to expire in April.
The decision sent Kenya’s dollar bonds lower, but Mbadi clarified that time constraints were the reason behind the cancellation.
He strongly denied reports suggesting that Kenya had failed to meet the IMF’s conditions.
“There is no problem with the IMF. The narrative being pushed is inaccurate,” Mbadi told Reuters.
He emphasized that Kenya’s economic fundamentals were stronger than expected, citing improved debt sustainability metrics.
The current loan programme, initiated in April 2021, includes $3.6 billion under an Extended Credit Facility and an additional $541.3 million for resilience and sustainability.
Approximately $800 million remains unused. Mbadi indicated that these funds could be carried over into a new agreement.
While the IMF declined to comment further, S&P Global Ratings warned that missed disbursements could affect Kenya’s debt management strategy and delay other funding, such as loans from the World Bank and the UAE.
