Kenyans Slam Govt after Treasury Announced Plans to Exit G2G Oil Import over Market Distortions

 

Kenyans have shared their disappointments after President William Ruto's administration admitted that the oil import credit deal has failed. President William Ruto speaking at a past event.  The National Treasury disclosed plans to exit the government-to-government (G2G) oil import deal with the Gulf countries, citing distortions it caused in the forex market. Why is Kenya exiting G2G oil deal? Ndung'u told the International Monetary Fund (IMF) that the G2G oil deal has not met its mandate of easing pressure on the shilling, currently exchanging at KSh 160 against the US dollar.  “The government intends to exit the oil import arrangement, as we are cognizant of the distortions it has created in the FX (forex) 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,” read Treasury's disclosure in part. This statement sparked debate among Kenyans, with some poking holes in the economic policies leveraged by Ruto's administration. @iamkipro said: "Seems the government of Kenya led by Williams Ruto and David Ndii is all experimenting with the Kenyan economy. Seems they have no clue or idea whether the policies they are putting in place work or don’t work."  @DiamondDk20 claimed: "Everyone tried to explain to David Ndii that this was a scam he refused..... You can't hide it far too long." @MwanikiMwangi15 argued: "G2G just like affordable housing is an exclusive cash cow for the ruling class. It was meant to do with competitive tendering and lock in a mark up for the few." @matukamanja noted: "Trial and error with our economy led by one... Ndii. @ArchLibwege claimed: "There's nothing like gulf companies. It's just Kenyan companies domiciled in Dubai." @SehnSecurities asked: "This is really bad for the economy. Do you know how fast a million as lost 400,000 shillings?" @IEAKwame wrote: "This admission that it did not eliminate any risks and will be dropped is a good thing. May the same candour inform the Housing Policy when the chips fall, because they shall fall with a resounding thud." @justinawamae noted: "I think going forward the KPIs should be the positive impact and how life for the ordinary Kenyan has been made easier."  shilling depreciated since signing of G2G oil deal In January 2023, the Kenya shilling exchanged at KSh 124 against the United States (US) dollar. Ruto estimated the dollar will exchange at KSh 120 or KSh 115 against the shilling after the signing of the G2G oil deal in April 2023. According to the report by the Kenya National Bureau of Statistics (KNBS) for the third quarter of 2023, Kenya's currency ceded ground against prominent currencies such as the Euro, Pound Sterling, US Dollar, and Japanese Yen by 30.3%, 29.7%, 20.6%, and 15.3%, respectively. In January 2024, the shilling crossed the KSh 160 mark exchange rate against the US dollar, with market analysts warning the trend could continue. 

by  Wycliffe Musalia