RAILA was right, I was wrong – RUTO ends controversial Saudi G-to-G oil deal even after praising it as he admits failure.

Friday, January 19, 2024 - President William Ruto has admitted that he made a blunder by not listening to former Prime Minister Raila Odinga on the Saudi government-to-government oil deal.

This is after he confessed that the oil deal had failed terribly to stabilize the Shilling and announced that he will exit the deal.

In a statement, the Kenya Kwanza administration said it would exit the government—government oil deal with select Saudi Arabia companies in December this year after admitting that the agreement was creating distortions in the foreign exchange market.

Documents signaling the end of the deal, which was touted as one of Ruto's fiscal policies, were captured in the latest report by the International Monetary Fund (IMF) on Kenya's plan to revive the economy.

Treasury was said to have argued that the controversial G2G deal had flopped as it failed to stabilise the exchange rate in favour of the Kenyan currency.

The G2G deal, introduced in April 2023, was brokered by Kenya’s Ministry of Energy and Saudi Aramco, Abu Dhabi National Oil Corporation Global Trading (ADNOC), and Emirate’s National Oil Company (NOC).

The G2G deal replaced the open tendering system that allowed oil marketers to be paid upon five days of delivery. This created unnecessary pressure on the foreign exchange market.

The Saudi oil deal provided a six-month credit for oil imports. 

According to the Treasury, the average monthly import volumes failed to attain the monthly minimums agreed upon.

The government's move to exit the deal comes after months of President Ruto defending the deal amid criticism over graft claims.

Raila had warned Ruto against the deal but the president would hear none of it, and now as it turns out, the former PM was right all along.

The Kenyan DAILY POST.