The government will receive a Ksh193 billion loan from the United Arab Emirates by the end of next week, according to reports.
The loan negotiated last year amounts to $1.5 billion with an interest rate of about 8.2 per cent.
According to reporting from Bloomberg, the loan is expected to hit the government coffers in the last week of February. The loan comes at a crucial juncture for President William Ruto’s government, which is facing funding shortfalls in several sectors.
Kenya is expected to receive the money in one tranche despite earlier indications that the funding could be staggered. This means the Treasury will receive the Ksh193 billion in a single disbursement.
Late last year, there were reports the government planned to stagger the disbursement in tranches to remain within the borrowing limits set by the International Monetary Fund (IMF).
Under that framework, Kenya was to receive the first tranche of disbursement worth Ksh90 billion last month, with the rest of the amount set to be channelled to the Kenyan accounts later.
Last year, the government sought financial support from the UAE to broaden its budget funding options, moving away from reliance on eurobonds, conventional bilateral lenders like China, and multilateral institutions.
Treasury has been in a foot race to find additional funds, and it emerged earlier this month the government is considering securing another loan programme with the International Monetary Fund (IMF) just two months before the end of the current programme.
Treasury Cabinet Secretary John Mbadi told Reuters, "Maybe before the current program comes to a close in April, there should be some indicators of whether we are starting a new program and what that new program will entail.”
Mbadi divulged that the government was still exploring other avenues, which could also include Eurobonds to fund budgets for this fiscal year.
He said, "We have the option of taking that... or we go to the market, which is open now, and with our good and positive credit."
The government is in urgent need of funds. The Ministry of Health and Education is asking for more money. They need to pay off debts of Ksh30 billion owed to private hospitals. Schools are also warning that they might close down if they don’t receive more support.
