Media reports disclosed that the payments of this aid were approved by the Board of Directors of the Afrexim Bank.
Africa Export and Import Bank (Afrexim Bank) will begin the payments of a $3 billion (Ksh408 billion) monetary assistance aid to Kenya. It would act as a short-term relief amidst the financial crisis.
Media reports disclosed that the payments of this aid were approved by the Board of Directors of AfreximBank. This money will flow down into different sectors of the economy to strengthen the Kenyan government to tackle some economic punches blown by global factors.
This aid is supposed to help in importing necessary goods, which will lower the inflation cost on common citizens. This aid will also support the infrastructure and manufacturing projects lined up for recovering the economy from the impacts of the Covid pandemic.
Last year, the Kenya National Trading Corporation (KNTC) was given the green signal to launch the government’s policies to normalise the prices of necessary goods during a drought that crippled domestic food production.
KNTC was also given approvals for the import of 2,000,000 tons of sugar, 150,000 tons of rice, 125,000 tons of cooking oil, 80,000 tons of beans and 25,000 tons of wheat duty-free.
They can import an additional 25,000 tons of wheat donated by Ukraine. These approvals will be effective till January 19, 2024.
The loan distribution has been delayed by five and a month since its announcement in a meeting between President William Ruto and Professor Benedict Okey Oramah, the President and Chairman of the Board of Directors of AfreximBank; this meeting dates back to November 17, 2022, held in Nairobi.
Dr. Ruto said in the meeting that this loan would increase the involvement of the AfreximBank in sectors like agriculture, infrastructure, housing, commercial irrigation, creative industry, and the MSME (micro, small, and medium enterprises) space.
The loan will step into the manufacturing and development of export facilities for processed agricultural output. This will include establishing industrial parks and promoting intra-African trade under the African Continental Free Trade Area (AfCFTA).
Kenya, DRC, and Chad became the signatories to a development impact-oriented subsidy of the AfreximBank; the Establishment Agreement of the Fund for Export Development in Africa (FeDa) also facilitated the loan payment procedure.
Afreximbank released a statement that these consecutive aids promote rapid momentum for Feda and display the willingness and loyalty of the member countries of Afreximbank to help accomplish the organisational investing goals. It builds up a robust mechanism to improve equity participation and equity funding rounds for the African companies that work towards industrialisation, Intra-Africa trade, and export developments.
Kenya is a debt-laden nation struggling to provide even the bare requirements of essential items to its citizens. It is trying to sustain itself anyhow under the shadow of its skyrocketed debt-servicing costs and tensions due to the nearing maturity of those debts. It is open to all meetings and events to raise money for its survival.
According to sources, people are overwhelmed by receiving the Ksh408 billion loans from Afreximbank will shield them from the heat of budgetary pressures. They are surprised to witness the speed and scale at which the developmental programmes are moving forward.
The Kenyan officials are considering raising funds through another round of Eurobond to get some extra relief. They plan to issue a fresh
Eurobond to deal with previous debts of a 10-year bond maturing next year amounting to Ksh 271.99 billion ($2 billion).
The Kenyan government looks forward to its National Treasury utilising the availability of international capital markets from 1st July 2023 to 30th June 2024 for the issuing of sovereign bonds.
From a pool of commercially borrowed funds worth Ksh 122.4 billion ($900 million), Kenya received its first set of payments of a reduced Ksh 68 billion ($500 million) dual currency from a group of banks.
Eurobonds were first issued under the Ruto budget of Ksh 3.663 trillion ($27 billion) in 2023-24. This budget was under a deficit of Ksh 720.1 billion ($5.3 billion).