Kenya is set to receive a $1.5 billion loan from the United Arab Emirates (UAE) by the end of next week, according to sources familiar with the matter. This funding aims to bridge Kenya’s budget deficit, which widened after the government abandoned planned tax hikes due to public protests. The loan, carrying an interest rate of 8.2%, is part of Kenya’s strategy to diversify its financing sources. Finance Minister John Mbadi highlighted that this loan is more favorable compared to a Eurobond issued earlier at a 10.7% yield. However, the International Monetary Fund has expressed concerns about the potential risks associated with this dollar-denominated external loan. This development also reflects strengthening ties between Kenya and the UAE under President William Ruto’s administration.
Source: Bloomberg
