Ruto man Ndii rules out new negotiations with IMF team

A standoff between Kenya and the International Monetary Fund (IMF) over a new multi-billion-dollar loan programme deepened last week after a former top government advisor, Dr David Ndii, declared that the country was “not negotiating” with the lender.

This directly contradicts the Treasury’s position, just as the IMF team concluded a visit to Nairobi without securing a deal.

The public rift exposes a widening chasm between President William Ruto’s administration and the Bretton Woods institution over the conditions for a financial lifeline, which is seen as critical to stabilising Kenya’s strained public finances ahead of the 2027 General Election.

An IMF staff team led by Haimanot Teferra left Nairobi last Wednesday after a nine-day mission, issuing a statement that made no mention of an agreement and said discussions would continue during the upcoming IMF-World Bank Group Spring Meetings.

“Discussions highlighted the need to strengthen fiscal discipline, enhance fiscal credibility, and build resilience to external shocks,” Teferra said, in a standard end-of-mission communique that carries no binding authority.

Dr Ndii, the former chairperson of the President’s Council of Economic Advisers and Ruto’s principal economic policy architect, however, appeared to dismiss the negotiation process entirely.

Ndii served as principal economic policy adviser to Ruto, before a High Court ruling in January 2026 declared the office unconstitutional.

“We are not negotiating with the IMF,” Ndii posted on Twitter, without elaboration.

The statement from the outspoken economist, who led the team implementing the government’s “Bottom-Up” economic transformation agenda, has thrown the status of the talks into confusion.

Reached for comment, a senior Treasury official who requested anonymity told The Standard the government remained “fully engaged” with the fund. “The adviser’s views are his own. We are continuing technical discussions as planned,” the official said. The IMF mission, which ran from February 24 to March 4, was intended to bridge differences that have stalled negotiations since late 2025. A previous attempt to reach a staff-level agreement collapsed in November over two major hurdles.

They include IMF concerns about the stability of the Kenyan shilling, which the fund officials have privately described as “too stable,” and the classification of billions of dollars in securitised loans, including a $3.5 billion (Sh455 billion) conversion of Chinese railway debt.

Central Bank of Kenya Governor Kamau Thugge told reporters last month that he expected a staff visit in January to continue talks. That timeline slipped to March, and now to the Spring Meetings in Washington scheduled for April.

The stakes are high for Ruto’s administration. The government is under acute fiscal strain, with public debt standing at Sh12 trillion as of September.  Revenue collections are consistently falling short, forcing the Treasury to project a wider fiscal deficit and increased borrowing in a draft 2026/27 budget that seeks to advance the president’s flagship housing, agriculture and healthcare pledges.

Any new IMF programme is expected to come with stringent conditions on spending, taxes and reforms to state-owned enterprises.

Such conditions are politically explosive. IMF-backed tax hikes in a 2024 Finance Bill sparked deadly, youth-led protests that forced the government to withdraw the legislation.

The IMF has also signalled that governance and anti-corruption reforms will be central to any new agreement. A 2025 IMF governance diagnostic mission identified “systemic vulnerabilities” in public financial management and procurement, according to a draft report.

Analysts say the government’s ability to balance the fund’s demands with voter expectations is rapidly narrowing.

“The authorities are trying to walk a tightrope: showing the IMF a path to fiscal consolidation while demonstrating to voters that their lives are improving,” said Ian Njoroge, an independent economist in Nairobi. “The budget tries to walk this line, but the IMF will want concrete, binding commitments."

Kenya’s previous $2.3 billion (Sh300 billion) IMF programme was terminated earlier this year after the country missed performance targets, costing it Sh110 billion in undisbursed funds. Without a new deal, the government faces sharply limited options.

Domestic borrowing is expensive and has surpassed internal limits, while access to international capital markets remains constrained by high interest rates.