Kenya has initiated discussions with the IMF for a new loan agreement, Jan Mikkelsen (photo), IMF’s resident representative announced yesterday.

In September 2018, the country decided not to renew a $989.8 million loan agreement with the Bretton Woods institution because of disagreements over an interest rate cap law for commercial loans.  

These discussions could be all about Kenya’s debt that rose to $50 billion in December 2018 and forecasted to reach $60 billion by 2020.

The IMF also raised concerns about the rise in Kenyan debt, which is already 56% of GDP against 44% in 2013. The institution upgraded the country’s risk of debt distress from low to moderate. In January 2019, the government announced the issuance of a $2.5 billion Eurobond to fund the budget deficit of the 2018-2019 fiscal year.

Moutiou Adjibi Nourou