Kenya negotiates new multilateral loans to fund budget through mid-2027

At the IMF and World Bank meetings in Bangkok, Central Bank of Kenya Governor Kamau Thugge said the country is seeking additional multilateral financing to cover its 2026/27 budget deficit, which is projected at 5.5% of GDP. Negotiations involve a potential World Bank Development Policy Operation and an African Development Bank reform-linked loan, building on earlier approvals but without any new funds yet released. Kenya is also weighing a debt-for-food swap with the US International Development Finance Corporation, a proposal first announced by President William Ruto in December 2025, though no bank has been appointed to arrange it.

The government plans to make about KES51.9bn available for emergencies through the World Bank’s Rapid Response Option, reallocating undisbursed project funds. An IMF mission will visit Nairobi in December for a routine Article IV consultation, but a new IMF programme is not part of one outlet financing plan. Inflation pressures remain elevated due to higher fuel costs and a weaker shilling, while the central bank kept its policy rate at 8.75%.