IMF Team Lands in Kenya to Engage Govt Over New Loan

A team from the International Monetary Fund (IMF) has arrived in the country to engage in talks with the government for another IMF-supported programme.
In a statement on Wednesday, September 24, the team’s leader, Mission Chief of Kenya, Haimanot Teferra, confirmed that they will engage in discussions with the government from Thursday this week to Thursday, October 9.
Teferra said that the discussions aim to pave the way for a new successor programme to the US$3.6 billion (Ksh465.2 billion)one that was terminated prematurely in March.
“At the request of the Kenyan authorities, an IMF staff team will begin initial discussions in the coming days on a possible Fund-supported program. We look forward to constructive engagement with the authorities and other stakeholders during our visit to Nairobi,” Teferra said.
“The IMF remains committed to supporting Kenya in its efforts to maintain macroeconomic stability, safeguard debt sustainability, strengthen governance, and promote inclusive and sustainable growth for the benefit of the Kenyan people,” she added.
Central Bank of Kenya (CBK) Governor Kamau Thugge, in a statement earlier this year, said the team will also conduct a deep assessment ofthe country’s economic and financial policies and a debt sustainability analysis, before the lender gives a green light to a new funding agreement
“We are indeed having discussions with the IMF, and the government did send a letter to the IMF requesting to negotiate a new arrangement. We are expecting an IMF team to come in September to start discussions on the Article IV consultation,” Governor Kamau stated.
This marks the second time in the last four months the IMF has sent a team to the country inpreparation for a new financing agreement.
In June, a team  from the lender was dispatched to the country to conduct a two-week assessment of the country’s anti-corruption legal and institutional framework, in addition to examining graft risks in fiscal and central bank governance, the rule of law, and market regulations.
According to an IMF spokesperson, the assessment was key in ensuring that the government reinforces its anti-graft capacity before it enters into a new funding agreement with the lender.
“The review is part of the IMF’s commitment to helping strengthen governance and anti-corruption frameworks,” an IMF spokesperson said.
If the plan sails through, the new agreement will play a key role in stimulating economic growth and lowering the cost of living in the country.
The announcement comes just a month after the Prime Cabinet Secretary Musalia Mudavadi confirmed that the government plans to issue a diaspora bond targeting citizens living abroad, in a bid to ease pressure on public finances and strengthen the country’s infrastructure needs.
A diaspora bond is a type of debt instrument issued by a country to raise its finances from its citizens living abroad.
If successful, the government aims to raise between $250 million (Ksh32.3 billion) and $500 million (Ksh65 billion), and then mobilise $3.8 billion (Ksh491 billion) in diaspora investments over the coming years.
The bond will be essential in addressing the infrastructural needs in some key sectors, including the energy and transport sectors, according to Mudavadi.