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Kenya Reportedly Set to Receive $1.5 Billion Loan From UAE by Next Week

16:53, 22 February 2025

Christina Glazkova

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The funding comes as President William Ruto’s administration seeks to stabilize the country’s fiscal position following the scrapping of controversial tax hikes in June that were projected to generate $2.7 billion. These tax measures were abandoned after widespread deadly protests, prompting the government to look for alternative financing sources.

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Kenya is expected to receive a $1.5 billion loan from the United Arab Emirates (UAE) by the end of next week, sources familiar with the matter told Bloomberg.

The loan, which was initially planned to be disbursed in stages, will now be provided in a single tranche, two sources reportedly revealed.

Sub-Saharan Africa

Nairobi Intends to Get $1.5 Billion Loan From UAE, Kenyan Finance Minister Says

17 October 2024, 18:53

Kenya approached the UAE for the loan last year. According to media reports quoting Finance Minister John Mbadi, the loan will have an 8.25% interest rate and a seven-year term. He mentioned that this option would be more affordable than obtaining a Eurobond loan, which carries a 10.7% interest rate.

The loan will also help boost Kenya’s foreign reserves ahead of negotiations with the International Monetary Fund for a new financial program, as its current $3.6 billion arrangement is set to expire on April 1.

Meanwhile, Kenya has revised its fiscal deficit forecast for the year ending in June, increasing it to 4.9% of GDP from the earlier projection of 4.3%.