Inside Kenya’s Ksh194 Billion Deal With UAE

Kenya is set to raise USD 1.5 billion (Ksh 194 billion) through a private bond placement in the United Arab Emirates (UAE) this week.

Initially planned for staggered disbursement, the funds will now be received in full, providing immediate liquidity relief and bolstering foreign reserves.

This move is part of Kenya’s strategy to diversify its sovereign bond markets beyond the traditional London Eurobond market, reducing refinancing risks following the challenges associated with the Eurobond 2024.

The UAE has been steadily expanding its economic influence in Africa. In January, it signed a trade and investment pact with Kenya and committed USD 35 billion to Egypt last year.

Meanwhile, Kenya is broadening its funding sources, with plans for Panda (RMB) and Samurai (Yen) bond issuances also in the pipeline.

The International Monetary Fund (IMF) has previously advised Kenya to assess the impact of its debt strategy on fiscal sustainability. This comes after the country revised its fiscal deficit projection for the 2024/2025 financial year from 4.3% to 4.9% of GDP.

“It is a private bond placement in the UAE, part of our strategy to diversify sovereign bond issues from London Eurobond market to mitigate the refinancing risk we suffered with Eurobond 2024. Also in pipeline Panda(RMB) and Samurai(Yen) issues, ”President’s Council of Economic Advisors Chairperson, Dr. David Ndii said.