David Ndii Offers to Share G-to-G Tips With Suluhu Amid Dollar Shortage Reports

President William Ruto’s economic adviser David Ndii on Wednesday, February 14, offered to provide structuring tips on the Government-to-Government deal to neighbouring country Tanzania to curb the US dollar shortage.

Taking to his social media platforms, Ndii responded to a letter addressed to the Ministry of Energy by the Tanzania Association of Oil Marketing Companies which sought a meeting to prevent the crisis.

Ndii acknowledged the issue and stated: “Ukiona mwenzako akinyolewa… we are happy to share G-to-G structuring tips” (when tragedy befalls your neighbour, take caution because you might be next).

The Oil Marketing Companies lamented that they were forced to buy dollars from the black market at exorbitant prices to purchase fuel.

An Image of a cargo clearance officer supervising clearance at Mombasa port



They emphasized that without resorting to such drastic measures, the country would face a depletion of its fuel resources.

The OMCs noted that they purchased at a rate of Tsh 2,800 (Ksh169.59) instead of the forex rate of Tsh2,574 (Ksh155.9) set by the Energy and Water Utilities Regulatory Authority (EWURA).

“Our members are desperately trying to source US dollars by all means possible to keep the country wet to the extent that they fall prey to these predatory practices,” the letter read in part.

“Because, if our members do not resort to these alternative means, our country will run dry of fuel, which will be catastrophic to everyone, especially the ordinary citizens.”

“Since the parallel market is not an official market, these forex purchases are not recognized by EWURA and thus OMCs do not submit them to EWURA at the end of the month. That is why, this month, only USD30 million, has been used to calculate the average forex rate, as opposed to the aggregate market demand of USD250 million,” the association added. 

The G-to-G arrangement allows OMCs to purchase oil on credit and hence relieve pressure on the dollar.

For instance, the Kenya-Saudi oil deal provided a six-month credit for oil imports as opposed to the previous arrangement whereby oil marketers were required to pay upon five days of delivery.

The deal was set to end in December 2023 but the government extended it by another twelve months.

Treasury Cabinet Secretary Njuguna Ndung’u recently confirmed that the deal was a temporary measure and would end in December 2024.

A photo of Kenyans queuing for fuel in a petrol station in April 2022.


Africa Briefing

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