Kenya to resume IMF talks in February after failed programme
By Kenneth Mwenda, January 29, 2026Kenya is preparing to restart talks with the International Monetary Fund (IMF) in February 2026 as it explores a new funding arrangement, officials at the National Treasury have confirmed. The negotiations were initially expected to begin in January but were postponed to allow more internal consultations.
Raphael Owino, the head of the Public Debt Management Office, said the IMF is expected back in the country before the end of February to continue discussions. He said the talks will focus on Kenya’s fiscal position, debt sustainability, and the wider economic outlook.
“Before the end of next month, the IMF is likely to be back in the country to continue with the discussions,” he said.
The renewed engagement follows the collapse of Kenya’s previous IMF programme in 2025. The fund approved the multi-year deal in 2021 but later withheld Ksh109.7 billion ($850.9 million) after Kenya failed to meet most of the agreed conditions. The country missed 11 of the 16 performance targets set under the programme.
Key failures included delays in restructuring Kenya Airways and the misuse of the fuel stabilisation fund, which was meant to cushion consumers but was diverted for other purposes. Kenya also breached spending limits, fell short on tax reforms, and delayed payments to suppliers, raising concerns about fiscal discipline.
Despite the renewed talks, Treasury Cabinet Secretary John Mbadi on December 18, 2025, cautioned against rushing into another IMF loan. He said countries with stable and growing economies should avoid borrowing from the fund unless they face serious economic shocks.
“We should avoid taking loans from the IMF because economies which are growing and are doing better should not go to IMF for loans,” Mbadi said in a television interview. He added that Kenya prefers the IMF’s role as an external reviewer of economic fundamentals rather than as a lender of last resort.
Reflecting this position, the Treasury has excluded IMF financing from budget plans for the coming years to manage public expectations. However, discussions with the fund quietly resumed towards the end of 2025. An IMF mission visited Kenya between September 25 and October 9, 2025 to assess the economy, with a focus on fiscal tightening and managing rising debt.
World Bank funds delayed
At the same time, Kenya is pushing for faster disbursements from the World Bank to ease short-term financing pressures. The government is seeking $750 million (approximately Sh96.7–97 billion) under the World Bank’s Development Policy Operations (DPO) 7 programme. Progress has been slow due to delays in meeting 11 prior conditions.
These conditions include advancing the Treasury Single Account, rolling out e-government procurement, and speeding up approvals for additional funds to county governments. Mbadi said the government is working to meet the requirements quickly to secure the funds earlier than March, which was the World Bank’s initial timeline.
Kenya’s public debt stood at around Ksh12.25 trillion as of late 2025, with the debt-to-GDP ratio hovering near 67-68 per cent, according to recent Central Bank of Kenya data and Treasury reports. The government relies heavily on domestic borrowing to plug budget shortfalls.
While a new IMF agreement could ease pressure, Kenya will need to show clear progress on reforms. The February talks will test how far the country has gone in addressing past weaknesses and restoring confidence with international lenders.
Critics, including Kiharu MP Ndindi Nyoro, have been particularly vocal, warning that the government borrows around Ksh3.5 billion every day and that continued excessive borrowing could have catastrophic consequences for future generations.
They argue that this pattern of heavy domestic borrowing, alongside past external loans, has created unsustainable pressures without delivering proportional economic benefits.