Strategic Loan to Strengthen Foreign Reserves and Economic Stability
Kenya is reportedly close to securing a $1.5 billion loan from the United Arab Emirates (UAE), with disbursement expected as early as next week. According to sources familiar with the negotiations, the loan will be issued as a lump sum rather than in tranches, as previously considered.
Kenya’s Treasury Secretary John Mbadi and the UAE Foreign Ministry have yet to respond to inquiries regarding the deal, as reported by Bloomberg. This funding is part of Kenya’s broader strategy to diversify its financing sources beyond Eurobonds, China, and multilateral lenders, strengthening its economic position.
Economic Support Amid Fiscal Challenges
The loan is expected to support the administration of President William Ruto, helping to stabilize the economy following last year’s widespread demonstrations, which led to the cancellation of key revenue-generating tariffs initially projected to raise $2.7 billion.
Additionally, the funds will help boost Kenya’s foreign reserves as the country prepares to negotiate a new program with the International Monetary Fund (IMF). Kenya’s current $3.6 billion IMF agreement is set to expire on April 1, 2025.
UAE’s Expanding Influence in Africa
The UAE has been expanding its economic footprint in Africa, securing key partnerships with major economies such as Nigeria, Ethiopia, and Egypt.
• In 2024, UAE President Sheikh Mohamed bin Zayed Al Nahyan met with Nigerian President Bola Tinubu to strengthen bilateral ties, addressing visa issues and trade relations.
• The UAE and Ethiopia signed a bilateral currency swap agreement worth 3 billion dirhams ($816.79 million) to facilitate trade and investment.
• Abu Dhabi’s sovereign wealth fund, ADQ, committed $35 billion to Egypt, primarily for the development of Mediterranean coastal land.
Kenya-UAE Trade Partnership Strengthens
In January 2025, Kenya and the UAE formalized their Comprehensive Economic Partnership Agreement (CEPA), reinforcing their trade ties. The agreement positions Kenya as a gateway to East and Southern Africa, while also securing the UAE’s role as a key financial and logistics hub linking the Middle East, Asia, and beyond.
The deal was signed in the presence of Kenyan President William Ruto and UAE President Sheikh Mohamed bin Zayed Al Nahyan, marking a significant step in deepening economic collaboration between the two nations.
