Monday, June 17, 2024

We did not admit failure of G2G oil deal, says government

The government has reaffirmed its position on the collapsed G2G oil deal saying that they did not admit any failure as reported by the media.

Through a statement, Treasury CS Njuguna Ndung’u clarified that the report from International Monetary Fund (IMF) was misinterpreted by the media despite facts that ought to have been observed.

He continued by sating that the position is that the government support of the G2G oil deal with Saudi Arabia oil firms has a rollover effect on stabilizing the market and most importantly the foreign exchange.

“The assertion that the government has admitted failure in the G-to-G approach is a gross misinterpretation. The quoted text in the IMF report specifically addresses the anticipated increase in rollover risk associated with private sector financing facilities supporting the arrangement, a predictable outcome given the inherent dynamics of such financial structures.” he said

“It is imperative to set the record straight on the nature and purpose of the government’s participation in the government-to-government (G to G) oil import arrangement. This initiative was implemented as a temporary measure with the primary objective of stabilizing the market and alleviating foreign exchange market pressures,” said the CS

He continued by saying the government move to exit the deal is to pave way for private companies to assume a prominent role.

“Contrary to misleading assertions, the government’s eventual exit from this arrangement has always been part of the strategic plan to pave the way for private sector players to assume a more prominent role.” said the CS

CS Njuguna Ndung’u praised the oil deal saying since its inception, the country has benefited greatly including no stock outs which was major problem before the deal was signed.

“Further, since the commencement of the G to G arrangement, the country and the region at large have enjoyed security of supply of petroleum products and there have been no instances of product stock outs as had been witnessed just before the arrangement,” he said

Speaking after signing the deal, President William Ruto noted that the deal will allow the country receive the stocks on credit thus not releasing pressure on the government on making immediate payment.

The President also noted that the deal will see the government pay for the oil in Kenya Shilling and in return it will not put much pressure on the dollar.

Even after sealing the deal, the Kenyan shilling has been on a free fall trading at Ksh 166 as at Friday raising more questions on the economy of the country. The prices of the oil have also been questioned and challenged by the opposition as a deliberate plan by a few individuals to benefit at the expense of Kenyans.

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