Inside Ruto's push to negotiate new IMF loan

President William Ruto signs the National Infrastructure Bill into an Act at State House Nairobi. [PCS] President William Ruto has pushed back against suggestions of a falling out with the International Monetary Fund (IMF), insisting Kenya will engage with the global lender strictly on its own terms and has every right to stand on its own feet. Speaking at a public forum on Tuesday, Ruto addressed mounting speculation about a standoff with the Fund after negotiations for a new programme concluded in early March without a deal, followed by a blunt social media declaration from his former economic adviser, David Ndii, that "We are not negotiating with the IMF." "We have agreed that if we need your money, we will come for it. If we don't need it, we will do with the resources we have," Ruto said in his first public comments since talks stalled. "I mean, how is that - how does that amount to a disagreement? Are we together? Yes. I mean, is it wrong to be able to stand on your own and do your own stuff? Is that a weakness or a strength?" The President did not mention the IMF by name, but his remarks appeared to be directed at mounting speculation about tensions with the Washington-based institution following the breakdown of talks earlier this month. An IMF team led by Haimanot Teferra departed Nairobi on March 4 without securing a deal after nine days of discussions, issuing only a terse communique saying talks would continue at the Spring Meetings in Washington next month. The Standard on Monday reported exclusively about the tension between the IMF team and Nairobi. The Fund is pushing for deep structural reforms, including fiscal consolidation, transparency around billions in off-budget debt, and governance overhauls. Ruto's administration, facing elections in 18 months, is, however, opposed to imposing the kind of austerity that triggered deadly protests in 2024. The government's draft Sh4.7 trillion budget for 2026-27, unveiled in February, tells the story of an administration in campaign mode rather than belt-tightening mode. Agriculture financing has been boosted to Sh77.7 billion, with fertiliser subsidies reaching seven million farmers. The NYOTA project is disbursing Sh50,000 business grants to young entrepreneurs across 27 counties. The Hustler Fund has pumped Sh72 billion into micro-enterprises. Analysts say they are not the policies of a government preparing to slash spending, and IMF officials have made clear they will not repeat the mistakes of Kenya's previous programme, which was terminated in 2025 after the country missed performance targets, costing it Sh110 billion in undisbursed funds. Central to the impasse is the classification of billions in off-budget debt, including a $3.5 billion (Sh452.31 billion) conversion of Chinese railway debt into a securitised loan. Fund officials argue these opaque structures mask Kenya's true debt burden and circumvent parliamentary oversight, making genuine fiscal planning impossible. Governance reforms have also emerged as another non-negotiable. An IMF governance diagnostic report, shared with Kenyan authorities in draft form, is understood to identify "systemic vulnerabilities" in public financial management and procurement. The Fund's spokesperson confirmed last month that publication of the report would be central to any new programme - a decision requiring Nairobi's consent. Kenya's recent credit rating upgrades, however, have strengthened the government's negotiating hand. Moody's lifted the country to "B3" from "Caa1" in January, citing reduced default risk. Fitch followed with an affirmation at 'B-' and a stable outlook. Treasury officials have pointed to the upgrades as validation of their approach: gradual reform without shock therapy. Analysts said yesterday the president's framing of the stalemate as sovereign independence rather than disagreement is likely to resonate with a domestic audience still scarred by the 2024 protests, which forced a humiliating policy reversal on IMF-backed tax hikes. Public debt has crossed Sh12.8 trillion, with servicing costs projected to consume Sh1.66 trillion in the coming financial year - nearly half of ordinary revenue. Revenue collections consistently have fallen short; by December 2025, the target was missed by Sh111.6 billion. Without a new IMF deal, Kenya's options narrow sharply, analysts say. Domestic borrowing is expensive and is already surpassing internal limits. International capital markets also remain constrained by high interest rates - Eurobond yields tracked by the central bank rose 51 basis points last week alone. The shilling's unusual stability - it traded at 129.02 per dollar for weeks on end - could become vulnerable without the backstop of an IMF programme, analysts say. Foreign exchange reserves stand at a comfortable $14.6 billion, but reserves alone cannot sustain confidence indefinitely, experts say. The Spring Meetings in Washington next month offer a deadline of sorts. A deal by then would allow disbursements to flow before the election cycle fully grips Nairobi's attention. "We continue to engage in close and constructive dialogue with the Kenyan authorities," an IMF spokesperson said last week, maintaining the diplomatic language that masks the high stakes and opposing positions.

Inside Ruto's push to negotiate new IMF loan

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