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Kenyan Government to Terminate G2G Oil Supply Deal

The Kenyan government has announced plans to exit a controversial oil supply agreement launched last April between state entities and three Gulf exporters.

Introduced by President William Ruto to halt the plummeting Kenyan Shilling against foreign currencies, the G2G deal involved three national oil exporters from the Gulf. However, according to a report by the International Monetary Fund (IMF), the Treasury revealed that the scheme has failed to yield the expected results.
Quoting the Treasury, the report states, "The government intends to discontinue the oil import arrangement due to the distortions it has caused in the FX market, along with the increased rollover risk of private sector financing facilities supporting it. We remain committed to seeking private market solutions in the energy sector."
The G2G deal marked a departure from the previous open tender system, where local companies competed to import oil monthly. Originally slated for nine months, the agreement was extended for an additional 12 months until December 2024, after which it will be terminated.
Since the inception of the scheme, the Kenyan shilling has depreciated by more than 20 percent against the US dollar, surpassing the historical low of 160 to the dollar.