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IMF Directs Kenya to Classify Securitized Tax Revenues as Public Debt
April 14, 2026
The IMF has advised Kenya to reclassify future tax revenues as public debt. Analysts noted that the move could potentially disrupt the nation’s fiscal strategy by limiting the government’s borrowing capacity and complicating upcoming negotiations. Kenya has raised ~$2.6bn (KES 335bn) by securitizing flows from fuel taxes, sports levies, and import duties to fund roads, stadiums, and railways. While Treasury Secretary John Mbadi said that these are “off-balance sheet” items, the IMF maintains that under international standards, such securitization must be classified as a debt liability. The reclassification comes at a critical juncture as Kenya seeks a new IMF program amid debt distress risks. The IMF also recommended expanding debt reporting to include pension liabilities, public-private partnerships, and pending bills. Following the withdrawal of proposed tax hikes due to protests in 2024, the government has increasingly relied on securitization and asset sales.
Kenya’s dollar bonds were trading stable with its 6.3% 2034s at 88.7, yielding 8.3%.
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