Kenya and the International Monetary Fund (IMF) have mutually agreed to terminate the ninth review of their multi-billion-shilling funding programme, originally set to run until 2025. The move, confirmed by both parties, signals a critical shift in the country’s financial strategy as the government grapples with mounting debt and fiscal shortfalls.

According to MSN News, a global news platform operated by Microsoft, the decision effectively halts the disbursement of USD 490 million (KSh 63.4 billion) under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF), alongside an additional USD360.9 million (KSh 46.7 billion) earmarked for climate financing under the Rapid Support Facility.

In an exclusive interview with TUKO.co.ke, economist Churchill Ogutu pointed to Kenya’s inability to meet key structural benchmarks and fiscal targets as a major factor behind the decision.

“Hardly surprising that the ninth review could not be completed,” Ogutu stated. “The IMF closely monitors fiscal targets such as revenue collection and structural reforms. Kenya has struggled to meet these requirements, making it increasingly difficult to justify continued disbursements.”

According to MSN News, the National Treasury’s 2025 Budget Policy Statement had already hinted at the shift, indicating that there would be no further IMF financing in the next fiscal year. This stands in contrast to April 2021, when Kenya entered the programme amid economic shocks and liquidity concerns.

Despite the termination, Ogutu suggested that Kenya could still seek a fresh agreement with the IMF, albeit under different terms.

“The successor programme could take various forms—a financed one, a non-funded one, or a precautionary one. It’s a wait-and-see on what direction the government takes,” he explained.

However, without immediate IMF support, Kenya may have to rely on costlier external and domestic borrowing, including Eurobonds and syndicated loans. Experts warn that such alternatives could further strain the country’s rising public debt.

As reported by MSN News, Kenya’s total public debt stood at USD 77.14 billion (KSh 11.02 trillion) in January 2025, with external borrowing at USD 39.32 billion (KSh 5.09 trillion) and domestic borrowing at KSh 5.93 trillion. The government’s aggressive borrowing strategy has seen it take on an additional KSh 440 billion in just seven months under President William Ruto’s administration.

While Kenya must still repay the IMF funds already disbursed, Ogutu noted that if the ninth review had gone through, the country’s borrowing under the programme would have reached its ceiling.