IMF says it held productive discussions with Kenya on economic, fiscal challenges

NAIROBI (Reuters) – The International Monetary Fund said on Tuesday it has held productive discussions with the Kenyan government on its plans to address the country’s economic and fiscal challenges, after nationwide protests forced it to abandon planned tax hikes.

President William Ruto abandoned this year’s finance bill in June, leaving the heavily indebted government with a bigger budget deficit for this financial year, mounting unpaid bills, and a delay in disbursement of IMF funding.

“We remain fully committed to support the authorities on their efforts to identify a set of policies that could support the completion of the reviews under the ongoing program as soon as feasible,” the IMF said in a statement.

Kenya agreed a four-year loan with the IMF in 2021, and signed up for additional lending to support climate change measures in May 2023, taking its total IMF loan access to $3.6 billion.

Kenya reached a staff level agreement with the IMF in June on the seventh review of its programme, but the protest and ensuing withdrawal of the finance bill put a sign-off by the fund’s executive board, and subsequent payout, on hold.