Kenya Secures $1.5 Billion Loan from UAE to Bridge Budget Deficit
Kenya is on track to receive a $1.5 billion loan from the United Arab Emirates (UAE) by the end of next week, as sources familiar with the matter have confirmed. The purpose of this funding is to address Kenya’s budget deficit, which expanded after the government shelved planned tax increases in response to public demonstrations. This loan, carrying an interest rate of 8.2%, forms part of Kenya’s efforts to diversify its funding sources. Finance Minister John Mbadi has pointed out that this loan offers more favorable terms compared to a previous Eurobond issuance with a 10.7% yield. However, the International Monetary Fund has raised concerns about the potential risks associated with this external loan denominated in dollars. This development also underscores the deepening relationship between Kenya and the UAE under President William Ruto’s leadership.
Source: Bloomberg
