• Kenya has signed a deal with Saudi Arabia and UAE.

• Kenya will be supplied with petroleum products with six months credit period.

• This will remove the need for importers to spend hundreds of millions of dollars monthly.

Kenya has recently signed a deal with UAE’s ADNOC and Saudi Aramco. This deal implies that they will supply Kenya with petroleum products with six months credit period.

The objective of this move is to curb the demand for dollars that has weakened the local currency.

The deals were signed on Friday, and announced by the energy minister, Davis Chirchir on Monday at a news conference after the two firms were picked from seven bidders.

This deal also means that Kenya will buy oil with its local currency, Kenyan Shillings instead of the US Dollars. This will boost the strength of the local currency.

The East African nation is switching to a longer payment period from settlement to delivery to remove the need for importers to spend hundreds of millions of dollars monthly.

Although 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.

Some private petitioners at the High Court are also challenging the plan. The report says the court is expected to give its initial directions on the case on Tuesday.