Published on 28/09/2024
President William Ruto’s administration has initiated talks with the United Arab Emirates (UAE) to secure a Ksh193 billion ($1.5 billion) loan to address Kenya’s budget deficit.
This move follows the International Monetary Fund’s (IMF) withdrawal of a loan offer after the Finance Bill of 2024 was retracted. The bill was a prerequisite for the IMF funds.
The UAE loan is seen as a crucial step to stabilize Kenya’s economy. The government is hopeful that this financial support will bridge the gap and ensure economic stability. The negotiations are ongoing, with both parties aiming for a swift resolution.
According to Bloomberg, the loan is expected to bear an interest rate of approximately 8.2%. However, the terms and conditions of the credit are subject to change as negotiations progress.
Kenya, currently facing a budget deficit of 4.3 % of its GDP, urgently needs funds as an alternative to the Ksh77 billion loan from the International Monetary Fund (IMF).
The Finance Bill 2024 was withdrawn by the President on June 26th after public demonstrations against the contentious bill.
Read Also. Kenya: President William Ruto Says He Won’t Sign Finance Bill 2024 After Public Pressure
