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Kenya Ranks Seventh Globally in IMF Outstanding Debt

NAIROBI — Kenya has secured a position among the world’s top ten borrowers from the International Monetary Fund, ranking seventh globally in outstanding credit obligations, according to newly released data from the Washington-based institution.

The IMF’s latest figures, published Thursday, reveal that Kenya currently owes the Fund SDR 2.95 billion, translating to approximately Ksh519.8 billion at current exchange rates. This substantial debt load places the East African nation behind only six other countries worldwide.

Argentina tops the global list with outstanding IMF debt of Ksh7.35 trillion, followed by Ukraine at Ksh1.82 trillion, Ecuador at Ksh1.22 trillion, Egypt at Ksh1.18 trillion, Pakistan at Ksh1.16 trillion, and Côte d’Ivoire at Ksh542.7 billion.

Regional Comparison

Within Africa, Kenya holds the third-largest IMF debt burden after Egypt and Côte d’Ivoire. The country’s borrowing exceeds that of several major regional economies, including Angola (Ksh468 billion), Ghana (Ksh454.8 billion), Ethiopia (Ksh280.4 billion), and neighboring Tanzania (Ksh235 billion).

The data underscores Kenya’s increasing dependence on external financing to meet budgetary requirements and fund economic reforms, despite an existing IMF program that has remained dormant for almost a year.

Government Response

In response to mounting concerns over foreign debt levels, President William Ruto has outlined an ambitious plan to wean the country off external borrowing for development projects within the next 10 to 20 years.

Speaking at State House Nairobi during a breakfast meeting with administrative officers this week, the President announced that the government would increasingly tap into domestic resources, particularly through securitization of public savings held in the National Social Security Fund.

Treasury Cabinet Secretary John Mbadi, Principal Secretary Chris Kiptoo, and Central Bank of Kenya Governor Kamau Thugge have been engaging with IMF officials at the ongoing Annual Meetings in Washington, D.C., as part of efforts to manage the country’s debt portfolio.

Currency Strategy Draws IMF Caution

Kenya’s recent decision to service its Standard Gauge Railway loan in Chinese yuan rather than US dollars has attracted scrutiny from the IMF, which has cautioned about potential currency risks associated with such moves.

A spokesperson for the multilateral lender told Bloomberg in November that while currency switches can reduce borrowing costs, they may also create new vulnerabilities depending on their structure.

“The IMF encourages countries to consider such operations within comprehensive medium-term debt and reserve management strategies to ensure an appropriate balance between cost and risk,” the spokesperson stated.

The government has indicated it will pursue alternative revenue sources that do not rely heavily on direct taxation as part of its strategy to reduce reliance on the Washington-based lender. However, questions remain about the sustainability and effectiveness of these approaches in managing Kenya’s growing external debt obligations.

Exchange rates: SDR 1 = Ksh176.20 (approximate)