President William Ruto's administration is seeking about $450 million (approximately Ksh58 billion) in emergency financing from the World Bank as the government moves to cushion the country from the economic effects of the U.S.-Israel war on Iran and potential weather-related shocks.

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According to reporting from Bloomberg obtained by Kenyans.co.ke , the government is finalising a Contingent Emergency Response Project (CERP) through which the Washington-based lender will channel the funds.

The financing is expected to be available by October, a time when El Niño is expected to land in the country, although both the amount and timing could still change.

The emergency funding comes at a time when Kenya is facing growing economic pressure from the Iran war, which has pushed up global oil prices, increased transport and manufacturing costs and disrupted international trade.

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Kenya is also preparing for possible weather-related challenges after the World Meteorological Organisation (WMO) recently warned that a strong El Niño is expected to intensify between August and October, increasing the likelihood of heavier-than-normal rainfall and extreme weather in many parts of the world.

If the forecast materialises, Kenya could experience above-normal rainfall that may disrupt transport, damage infrastructure, affect agriculture and increase the risk of flooding in vulnerable areas, placing additional pressure on the economy.

Further, the country is particularly vulnerable to global oil price shocks because it imports most of its fuel. Higher international prices often translate into increased transport costs, more expensive fertiliser and higher prices for food and other essential goods.

The conflict in the Middle East has disrupted shipping routes, increasing freight costs and affecting exports, while uncertainty in global markets has weighed on investor confidence and foreign exchange earnings.

Unlike a conventional development loan, the proposed World Bank financing would come through an emergency response mechanism that allows countries to quickly redirect part of the funding allocated to existing projects to respond to crises.

The request follows an earlier warning by the World Bank that oil-importing countries such as Kenya are among the most vulnerable to rising fuel and food prices caused by the conflict in the Middle East.

📰 Source: Kenyans.co.ke