NAIROBI, April 17 – Kenya is in discussions with the World Bank to access emergency financing as it moves to contain the economic fallout from the ongoing US-Iran war, becoming one of the first African countries to signal such plans publicly.
Central Bank Governor Kamau Thugge said the government is seeking support through the lender’s Rapid Response Option, a facility that allows countries to quickly draw down up to 10% of undisbursed funds from existing programs.
Kenya currently has a $1.2 billion development policy loan approved in 2024, creating room for immediate access to liquidity.
Thugge noted that the disbursement process could be completed swiftly, potentially before the end of the country’s financial year in June, as the facility does not require full board approval. Discussions between Kenyan authorities and the World Bank are ongoing to determine the exact amount to be accessed.
The request comes as the global economic impact of the conflict begins to filter through as Kenya has already raised fuel prices to a three-year high and is bracing for increased food costs driven by rising fertilizer prices.
Key export sectors are also feeling pressure. Tea and flower shipments have been affected, while remittance inflows face risks, with about 10% of Kenya’s total remittances originating from the Middle East.
Separately, Kenya is holding talks with the International Monetary Fund for a new program after ending its previous arrangement early last year. While discussions are ongoing, no timeline has been set for a potential agreement.
Thugge acknowledged differences between Kenya’s Treasury and the IMF regarding the classification of certain infrastructure financing, particularly future tax revenues tied to major projects. However, he emphasized that the issue reflects a technical disagreement rather than undisclosed liabilities.
