Kenya Joins Top 10 IMF Borrowers Worldwide
Kenya has now become one of the world’s top 10 borrowers from the International Monetary Fund (IMF), ranking seventh globally in terms of outstanding debt.
This new position highlights the country’s growing reliance on external financing to support its economic and development programs.
According to the latest IMF data released on Thursday, Kenya currently owes the Fund an outstanding amount of SDR 2.95 billion, which is roughly Ksh519.8 billion at the current exchange rate. This figure places Kenya ahead of many other nations in terms of IMF borrowing.
Globally, only six countries owe more to the IMF than Kenya. Argentina tops the list with a staggering Ksh7.35 trillion (SDR 41.8 billion), followed by Ukraine at Ksh1.82 trillion (SDR 10.3 billion), Ecuador Ksh1.22 trillion (SDR 6.93 billion), Egypt Ksh1.18 trillion (SDR 6.73 billion), Pakistan Ksh1.16 trillion (SDR 6.59 billion), and Côte d’Ivoire Ksh542.7 billion (SDR 3.08 billion).
Within Africa, Kenya ranks third behind Egypt and Côte d’Ivoire. Other significant African economies include Angola, which owes Ksh468 billion (SDR 2.66 billion); Ghana, Ksh454.8 billion (SDR 2.58 billion); Ethiopia, Ksh280.4 billion (SDR 1.59 billion); and neighboring Tanzania, Ksh235 billion (SDR 1.33 billion), all of which have smaller IMF debts compared to Kenya.
Despite the fact that Kenya has another IMF program in place that has remained largely inactive for nearly a year, the latest loan data underscores the country’s increasing dependence on external borrowing to finance its budgetary needs and implement essential economic reforms.
In an effort to reduce reliance on the Washington-based lender, Kenya has announced plans to explore alternative sources of revenue that do not rely on direct taxation.
One such strategy includes the securitisation of government and public savings, particularly those held in the National Social Security Fund (NSSF).
This approach aims to channel domestic savings into financing development projects while reducing external debt exposure.
President William Ruto has emphasized that the government’s long-term goal is to eliminate borrowing from external lenders for development projects within the next 10 to 20 years. This strategy is part of broader efforts to tackle the country’s growing foreign debt burden.
Speaking during a breakfast meeting with administrative officers at State House in Nairobi on Tuesday, during the launch of the Jukwaa la Usalama Report, President Ruto reiterated that the government will increasingly depend on the securitisation of Kenyans’ NSSF savings to meet both financial obligations and development goals.
Other measures introduced by the government include switching some loan repayments from the US dollar to the Chinese yuan. For example, Kenya recently opted to repay a portion of its Standard Gauge Railway (SGR) loan in yuan rather than in US dollars.
While such moves can help manage costs, the IMF has issued a cautionary note regarding potential currency risks.
A spokesperson for the IMF in Washington D.C. told Bloomberg in November that, although changing the currency of debt repayments can be a proactive and strategic approach to debt management, it is crucial for countries to carefully evaluate any risks involved.
“While these transactions may lower costs, they can also introduce currency risks depending on their structure,” the spokesperson said.
The IMF further advised that such operations should be carried out as part of a comprehensive medium-term debt and reserve management strategy to ensure a careful balance between reducing costs and managing risks effectively.
Kenya’s rising position among the top IMF borrowers highlights both the challenges and opportunities in managing external debt while exploring innovative strategies to support national development.
The government’s efforts to diversify revenue streams and reduce dependency on foreign lenders signal a broader shift toward sustainable economic management in the years ahead.
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