Treasury CS NJUGUNA NDUNG’U reveals the real reason RUTO was forced to exit the G-to-G oil deal with Saudi Arabia – You won’t believe this


Saturday, January 20, 2024 - Treasury Cabinet Secretary Njuguna Ndung'u has confirmed that Kenya plans to exit the government-to-government oil deal with select Saudi Arabia companies by December. 

However, he refuted reports alleging that the exit was occasioned by the frustrations witnessed in the foreign exchange market, insisting that Kenya had planned to eventually end the deal once it achieved its end goals. 

In a statement, Ndung’u explained that the G2G arrangement was implemented temporarily to stabilize the Kenyan shilling amid the acute dollar shortage.

He noted that at the time of the deal's conception, the monthly demand for US Dollars by the oil sector had put a strain on the country's forex reserves and subsequently threatened the security of the supply of petroleum. 

Pressure was also exerted on other critical sectors such as food and agriculture that heavily rely on imports.

Hence, the government's eventual exit from the deal was part of a strategic plan to pave the way for the private sector players to take a more prominent role. 

Further, the Treasury CS disputed claims that the oil deal was a 'failure' owing to the weakening of the shilling in the market.

Ndung'u explained that the oil agreement faced difficulties, including the rollover risk linked to private sector facilities that were backing the arrangement.

He added that this was a predictable outcome given the arrangement of the deal.

The CS credited the oil purchased on credit for easing the pressure on the US dollar when the country was at risk of an economic shutdown.


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