Kenya’s renewed IMF engagement sparks warnings over austerity risks, social spending cuts, and weakened budget transparency.
Kenya’s re-engagement with the International Monetary Fund (IMF) could push fiscal consolidation into harmful austerity if social spending and budget oversight are not protected, the country’s budget watchdog has warned. Speaking at the launch of the Kenya Macro Fiscal Analytics Snapshot 2025–2026, Controller of Budget Dr. Margaret Nyakango cautioned that IMF-backed reforms must be carefully sequenced to avoid worsening inequality and service delivery gaps.
Kenya entered a new IMF-supported programme to stabilise public finances strained by rising debt-servicing costs, weak revenue growth and social pressures. While the programme aims to restore confidence, Nyakango warned that rapid fiscal tightening could suppress household welfare, raise living costs and weaken health, education and social protection systems.
The report highlights falling per capita health spending, constrained education funding and delayed social protection payments, alongside persistent budget credibility issues such as revenue overestimation. Nyakango also raised concerns that off-budget vehicles like the National Infrastructure Fund could weaken parliamentary oversight if not properly monitored.
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