Kenya Kicks Off Loan Talks With IMF, World Bank Weeks After Cancelling Ksh466 Billion Deal

Treasury Cabinet Secretary John Mbadi and his Principal Secretary, Chris Kiptoo, on Monday, embarked on fresh talks with the Bretton Woods Institutions in an effort to improve Kenya’s economic standing.

The duo, who were accompanied to the United States by a delegation of financial experts to attend the Governance Diagnostic Assessment during the 2025 Spring Meetings, met officials from the International Monetary Fund (IMF) and World Bank on the sidelines of the event.

Why It Matters: The meetings came weeks after President William Ruto’s administration cancelled a 4-year agreement with the IMF (valued at Ksh466 billion) and subsequently announced that it would renegotiate its engagement terms in the wake of the new tariffs announced by US President Donald Trump and protests by Gen Zs and millennials that forced him to shelve the 2024 Finance Bill.

First, the CS and his entourage sat down with the IMF's top brass, led by Yan Liu, the director of the legal department.

"The discussions centered on Kenya’s governance and anti-corruption frameworks, focusing on strengthening institutions, promoting transparency, and enhancing the efficiency of public financial management," a dispatch from the Treasury Ministry read in part.

At the event, CS Mbadi appreciated the IMF’s continued support, saying governance is a cornerstone of Kenya’s economic agenda. 

He further called for sustained efforts in strengthening institutional capacity, legal frameworks, and accountability mechanisms to reinforce public trust and drive economic resilience.

Across the aisle, the Kenyan delegation also met the World Bank team led by Amit Dar, Director of Strategy and Operations for Eastern and Southern Africa, alongside Mr. Qimiao Fan, Country Director for Kenya, Rwanda, Somalia, and Uganda.

The parties discussed Kenya’s economic trajectory and key areas of collaboration, including economic performance and fiscal outlook, private sector engagement, the World Bank/Kenya portfolio, Development Policy Operation 7 (DPO-7), and upcoming pipeline projects targeting sustainable development.

Catch Up Quick: Late last month, Kenya cancelled the 4-year agreement with IMF forgoing Ksh110 million ($850 million) in the process.

Last week, Prime Cabinet Secretary Musalia Mudavadi noted that the state would renegotiate its engagements with financial institutions with keen interest in evading a repeat of the anti-Finance Bill 2024 protests which forced the Head of State to reconstitute his Cabinet and shelve the bill in its entirety.

“Some of the targets were extremely steep. If you are unrealistic with some of your projections, you end up exerting a lot of pressure on your economy and your people,” the CS told the press.

Of concern was the US Department of Trade's imposition of a 50 percent tariff on U.S. corn imports, as well as other regulatory requirements, arguing that the move effectively blocked U.S. corn exports to Kenya despite the market's budding potential.

“Kenya imposes a 50 percent tariff on imports of U.S. corn and imposes burdensome regulatory requirements, effectively blocking U.S. exports of corn,” the department stated.

Overall, Kenya was hit with a 10% tariff, which was later frozen for 90 days by Trump, who noted that the decision was reached after various consultations between the US and countries affected by the tariffs.