It’s said that history doesn’t repeat, but it often rhymes. Can this phrase apply to Kenya’s economic journey? Recently, whispers from unnamed insiders suggest a major shift in financial strategy. Insider sources, who chose to remain anonymous, leaked that the promised loan to Kenya will be delivered in full rather than in stages as originally intended. Such a financial influx at one go is quite unconventional, isn’t it?
Not much has been said publicly; neither Kenya’s Treasury Secretary John Mbadi nor the UAE Foreign Ministry have responded to inquiries, as reported by Bloomberg. It’s reminiscent of the famous axiom: “Silence is an answer too.”
Just last year, amidst a shifting global financial landscape, Kenya sought alternative fundings. Steering away from euro bonds and familiar creditors like China, the country knocked on the UAE’s door, exploring new avenues. Who could resist the allure of diversifying financial streams, especially when traditional means seem restrictive?
The context of this loan paints vivid images of recent historical events. Under President William Ruto’s administration, Kenya faced upheaval with massive protests in June 2022. These demonstrations forced the government’s hand, abolishing major anticipated revenue-generating tariffs. Could this financial discontent be a driving factor behind Kenya’s search for new funding lifelines to plug the fiscal gap of a projected $2.7 billion in lost revenues?
As negotiations with the International Monetary Fund loom, and with an impending expiration of a $3.6 billion agreement in April, the timing of this loan becomes pivotal. Strengthening foreign reserves appears to be a strategy of necessity. Isn’t it intriguing how history has a way of dictating economic measures?
UAE in Africa
The Middle East’s eyes are firmly set on Africa, in a game of geopolitical chess against the backdrop of Russia and China’s deepening engagement with the continent. Through strategic partnerships, the UAE is making decisive moves. Most notably, they recently strengthened ties with Nigeria, a significant economic powerhouse.
An interesting anecdote unfolded earlier this year when Nigeria’s President Bola Tinubu engaged directly with UAE’s Sheikh Mohamed bin Zayed Al Nahyan over a pressing visa matter. Doesn’t this scenario bring to mind the saying, “It’s not what you know, but who you know?”
Collaborations have transcended border disputes, as seen in July, when Ethiopia’s central bank inked a bilateral currency swap worth billions with the UAE. The financial dance doesn’t stop there. ADQ, an Abu Dhabi wealth group, committed a staggering $35 billion to Egypt, primarily to develop strategic coastal assets. The breadth of these engagements signals a robust UAE presence in African development. As Bloomberg highlights, this financial commitment is indeed manifold.
Kenya too is part of this strategic tapestry. A notable “Comprehensive Economic Partnership Agreement” with the UAE underscores the pivotal role of trade relations. Could this agreement herald a new era for Kenya, transforming it into a major player in the UAE’s trade network while opening lucrative export channels?
Ceremony and protocol beautifully encapsulated the importance of the moment. Kenyan President William Ruto and UAE President Sheikh Mohamed bin Zayed Al Nahyan officiated the signing with the gravitas expected of leaders steering economic futures. According to statements from Kenya’s State House, this deal fortifies Kenya’s stature as a gateway to Southern Africa while spotlighting the UAE’s significance as a global logistics and financial nexus.
As chapters in global alliances turn, one might ponder: Are these financial and strategic maneuvers simply agreements on paper, or do they reflect the harmonious future both nations envision?
Edited By Ali Musa
Axadle Times International–Monitoring
