Kenya’s finance minister, John Mbadi, has announced that talks with the International Monetary Fund (IMF) over a new lending program have reached a stalemate. The impasse is due to a disagreement over the classification of debt, with the IMF seeking to categorize securitized loans for infrastructure projects as sovereign debt, a move that Nairobi opposes.

The Kenyan government has been seeking a new bailout from the IMF after the expiration of the previous $3.6 billion deal in April. The country is hoping to secure a new loan to support its economic development and stabilize its finances. According to Mbadi, further talks will be held to reach an agreement, although no specific timeline has been set.

Kenya is also exploring other financing options, including a bond issuance later this month, which is expected to raise $1.3 billion. In a positive development, the country recently managed to reprofile its $5 billion loan from China, which was used to build a modern railway, saving the Treasury millions in interest payments.

Kenya’s external debt stands at $40.5 billion, with the World Bank, eurobond investors, and China being the largest creditors. The country owes $14.4 billion to the World Bank, $7.52 billion to eurobond investors, and almost $5.04 billion to China, according to Treasury data. The IMF loan is seen as crucial in helping Kenya manage its debt obligations and achieve economic stability.

The stalemate in talks with the IMF is a significant development, as Kenya’s economic growth and development depend on securing new financing. The country’s ability to manage its debt and secure new loans will be closely watched by international investors and creditors. As the talks between Kenya and the IMF continue, the outcome will have significant implications for the country’s economic future.