President William Ruto's administration has requested for a new funding program from the International Monetary Fund (IMF) after agreeing not to proceed with a final review of an existing facility that would have unlocked $800 million (approximately KES103.4 billion). 

''The Kenyan authorities and IMF staff have reached an understanding that the ninth review under the current extended fund facility and extended credit facility programs will not proceed,'' Haimanot Teferra, the IMF's mission chief, said in a statement issued at the end of a visit to Nairobi.

“The mission team engaged with the Kenyan authorities on recent developments and the macroeconomic outlook. The IMF has received a formal request for a new program from the Kenyan authorities and will engage with them going forward,” it added.

Kenya’s current Kes466.2 billion ($3.6 billion) IMF programme began in April 2021 and is due to expire in April. The agreement focused on fiscal consolidation, governance reforms, and restructuring state-owned enterprises. 

The IMF mission team met with President William Ruto and top state economic officials. However, they concluded discussions without disbursing the next cache of funds, worth KES103.6 billion, under the current Extended Fund Facility and Extended Credit Facility programs.

The expiry of the facility without the final disbursement is likely to leave Kenya with a budget-financing gap if the IMF does not approve the new request in time. This is because the decision comes at a time when Kenya is struggling to stabilize public finances, maintain investor confidence, and manage debt repayments. 

The Extended Fund Facility (EFF) is designed for countries facing deep, structural economic challenges that require long-term reforms. It provides financing for three to five years, with repayment over 4.5 to 10 years thus allowing governments to implement policies that restore stability.

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