NAIROBI (Reuters) – Kenya has signed deals with UAE’s ADNOC and Saudi Aramco for the supply of petroleum products with a six months credit period, its energy minister said on Monday, a move designed to curb demand for dollars that has weakened the local currency.
The East African nation is switching to the longer payment period from settlement on delivery, to remove the need for importers to spend hundreds of millions of dollars every month.
The deals were signed on Friday, Energy Minister Davis Chirchir told a news conference, after the two firms were picked from seven bidders.
Foreign currency traders have cast doubt on the ability of the plan to stem the pressure on the shilling currency, saying it merely amounts to a postponement of demand.
The plan is also being challenged by some private petitioners at the High Court. The court is expected to give its initial directions on the case on Tuesday.
(Reporting by Duncan Miriri; Editing by Tomasz Janowski)
