Kenya to Exit G-To-G Oil Deal Due To Forex Distortion

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Kenya is planning to exit a government-to-government (G-to-G) oil deal that was signed with two Gulf countries due to forex distortion.

The National Treasury cited the high risk facing private sector financiers of the facilities and its commitment to private market solutions in the energy market.

”The government intends to exit the oil import arrangement, as we are cognizant of the distortions it has created in the FX market, the accompanying increase in rollover risk of the private sector financing facilities supporting it and remain committed to private market solutions in the energy market,” the IMF wrote in its latest country report for Kenya.

“We commit that all FX conversions done as part of the oil scheme,” reads the IMF report for Kenya.”

Kenya last year inked the G-to-G fuel deal with Saudi Arabia and the UAE to ease forex pressure due to dollar shortages.

Likewise, President William Ruto said the agreement would afford local marketers breathing room for settling dollar-denominated fuel imports.

“We also gave them the guarantee that dollars will be available to them and we have made sure that is the case,” President Ruto said.

“The rest is private business. The State is not a broker or an in-between so the entire process is private sector-led.”

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