PREVIEW
No agreements reached after latest IMF staff missions
Kenya and Senegal both continue to experience slow progress towards agreeing new lending arrangements with the International Monetary Fund.
Yields on Senegal’s Eurobond loans jumped 24 basis points to 13.2% on 7 November after a two-week IMF staff mission ended without a new package (Dispatches, 27/10/25, Hidden loans ramp up debt servicing costs). President Bassirou Faye’s government has been pushing for a fresh credit facility ever since the IMF halted a US$1.8 billion program last year when auditors discovered more than $7bn of hidden liabilities.
The IMF has praised the government’s plans, which include new taxes on gambling and mobile money transactions, pointing to ‘notable progress’ on debt management, though it has warned that the ‘the very high tax revenue expected from the announced measures constitutes a significant risk’.
In Kenya, talks on replacing loan programmes that expired in April are also moving slowly. Following the latest staff mission, government officials said discussions are likely to extend into 2027, an election year.
One of the main points of contention is whether securitised loans, which President William Ruto’s government wants to use to fund infrastructure projects, including renovation of the main airport in Nairobi and extending a Standard Gauge Railway to Uganda, should be treated as sovereign debt.
Though the immediate pressure on Kenya’s public finances has eased, and the central bank has boosted currency reserves to the level of more than five months of imports, the Finance Ministry’s debt service payments remain high (AC Vol 66 No 8, Ruto’s fiscal gamble – can he break the debt trap by 2027?)
‘If it comes, it will be a windfall for us… It may help us reduce some other loans, whether domestic or external,’ Treasury Cabinet Secretary John Mbadi told journalists on 4 November about the prospect of IMF support.
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