Kenya requests urgent support from the World Bank to address the impact of energy prices.

Written by: Mohamed Ragab

Kenya has submitted a request for support financial Urgent from the World Bank, in a move aimed at containing the economic repercussions of the Iranian war, especially in light of increasing pressure on energy prices.

The governor of the central bank confirmed Kenyan Kamau Thugi said the amount of funding required was “large,” without disclosing specific figures.

inflationary pressures

Like other energy-importing nations, Kenya faces increasing challenges in avoiding shortages of essential goods, particularly fuel, amid rising prices. The government is striving to control inflation, which could worsen due to continued volatility in global oil markets.

Kenya is the first major emerging economy to formally request support from the World Bank, at a time when Kristalina Georgieva, Managing Director of the International Monetary Fund, indicated that at least 12 countries are seeking financial assistance to address the crisis. Other countries, including Egypt, have also revealed that they are in contact with international financial institutions.

Potential effects 

Analysts, including Andrew Matheny of Goldman Sachs, have warned that the Kenyan economy is one of the most vulnerable in the region to fluctuations in oil prices, which could put pressure on the value of the Kenyan shilling.

Despite this, Kenyan dollar bonds recorded a notable increase, reflecting improved investor confidence following the request for support.

In an effort to ease the burden on citizens, Prime Minister William Ruto signed a law reducing the value-added tax (VAT) on petroleum products from 131 TP3T to 81 TP3T for three months. The central bank also lowered its 2026 economic growth forecast to 5.31 TP3T, down from 5.51 TP3T previously, citing risks associated with oil prices.