By Enyichukwu Enemanna
Kenya has sent a request for emergency financial support from the World Bank to help it manage the economic shocks triggered by the war in Iran, its central bank governor has said.
The East African country heavily depends on imported energy, just like other countries on the continent to meet its local demands and has been struggling to manage the shortages of essential commodities including petrol, while dealing with a marginal cost increase that may blossom into inflation.
Kenya is the first larger emerging economy to publicly confirm a formal request to the World Bank, although a number of countries, such as Egypt, have said they have approached multilateral lenders.
IMF head Kristalina Georgieva said that at least 12 countries are seeking assistance from the Fund to cope with the crisis.
The request for funds was “significant”, Kenya’s central bank governor, Kamau Thugge, told Reuters on Thursday on the sidelines of the IMF and World Bank spring meetings, but did not provide a figure.
Analysts welcomed the move, saying it will boost confidence and ease market pressure.
“While Kenya’s external buffers are large and ample, it is among the most exposed countries in the region to the Iran price shock given its oil import dependence,” Andrew Matheny, senior economist at Goldman Sachs said.
He added, “Risks to the shilling are tilted toward depreciation, especially in the event of a more protracted shock that implies higher oil prices for longer.”
Kenya’s dollar bonds rose the most among African issuers on Friday, with the 2034 and 2048 bonds gaining by nearly a cent to be bid at 89.21 and 99.25 cents on the dollar respectively, Tradeweb data showed. ,
The World Bank loan would be in addition to a budgetary support loan, known as development policy operations, that both sides were discussing before the outbreak of the crisis, Thugge said.
Rapid Response Support is a term used by the World Bank for its fast-disbursing financial windows and policy support that helps countries respond quickly to shocks or crises.
In a sign of the risks facing Kenya’s public finances, President William Ruto signed a law on Friday cutting value-added tax on petroleum products to 8% from 13% for three months to cushion consumers from a surge in crude prices.
Last week, the central bank lowered its 2026 growth forecast to 5.3% from a previous projection of 5.5%, saying the Iran war posed risks to key sectors of East Africa’s biggest economy.
Kenya’s shilling weakened slightly at the peak of the fighting between the U.S. and Israel and Iran, but has since clawed back most of the losses, Thugge said.
“If there’s pressure …. definitely it will depreciate,” he said, adding that the central bank has enough reserves to curb volatility.
