Budget documents tabled in Parliament show that the National Treasury has excluded expected inflows from IMF programmes such as the Extended Credit Facility (ECF), Extended Fund Facility (EFF), and the Resilience and Sustainability Fund (RSF).
According to Mbadi, the move is aimed at reducing dependence on IMF-backed funding while shielding Kenyans from harsh austerity measures often attached to the loans, including tax increases, spending cuts, and public sector hiring freezes.
“Going forward, we are trying to minimise our focus on the IMF,” Mbadi said, while clarifying that Kenya is not ending its engagement with the lender entirely.
The decision comes after Kenya’s previous IMF programme faced challenges and uncertainty over whether fresh negotiations would unlock additional billions in support.
Analysts say the Treasury is now leaning more heavily on alternative financing sources, including the World Bank and the African Development Bank.
Also Read
The latest Budget Policy Statement indicates the government plans to continue fiscal consolidation by increasing domestic revenue collection, reducing unnecessary expenditure, and improving efficiency in tax administration rather than introducing politically risky taxes.
Kenya’s government has been under pressure to balance debt repayment obligations with growing public opposition to higher taxes following nationwide protests witnessed in recent years.
IMF-linked reforms had previously pushed for stronger revenue collection measures, including expanded VAT and excise taxes.
Economists warn, however, that while avoiding IMF loans may ease pressure on citizens in the short term, the absence of an IMF-backed programme could affect investor confidence and Kenya’s international credit credibility.
The Treasury now hopes that stronger local revenue mobilisation, privatisation plans, and support from other development partners will help bridge the budget deficit without triggering public backlash ahead of the next election cycle.
