Kenya loses Sh11bn stake in AfDB amid cash crunch

The shares, which are valued at Sh11.9 billion, were taken by other countries in the AfDB, which is owned 8.5 percent by Egypt, Nigeria (7.6 percent) and the United States (5.5 percent).

An AfDB share is valued at Sh1.77 million, but countries are expected to pay only six percent of the going price to keep their shares. The remaining 94 percent is a commitment by the country that it will pay in case the bank goes into financial distress.

The drop came after the National Treasury defaulted on a Sh1.3 billion ($10 million) annual subscription fee meant to keep Kenya’s shareholding at the lender, a director at the ministry said.

According to the source, who requested anonymity, the government failed to pay part of the required Sh1.3 billion in time.

“Every treasury has competing needs, including subscriptions to different international organisations. Sometimes they miss the payment deadline. At the AfDB, this means loss of shares, but it doesn’t matter that much,” the source the said.

AfDB gives countries up to 120 days to pay the expected subscription fees for the period, after which they forfeit the shares corresponding to the unpaid capital.

The shares can be bought by another country.

Last year, many of the lost shares by different countries were bought by Egypt, which raised its shares at the bank from 921,766 to 1.48 million, increasing its control from 5.7 to 8.5 percent and toppling Nigeria to become the single largest shareholder.

A higher shareholding at the bank means a bigger say in its lending, programmes and even appointment of leadership positions, including the bank’s president and vice-president.

To get a loan approved under the Group’s non-concessional arm, a country needs at least 67 percent of the votes to favour it, while for the concessional African Development Fund arm, it needs 70 percent.

African countries own a combined 60 percent of the bank, while non-regional members like the US, the United Kingdom, Canada, Japan and China own the remaining 40 percent.

Having a bigger say at the lender makes it easier to get projects and loans approved, the source at the National Treasury said, but African countries often vote in unison.

Failure by the National Treasury to complete the annual subscription followed a cash crunch in the country.

“We have been facing budget challenges. Sometimes we delay even paying salaries as the Kenya Revenue Authority may fail to deliver. That means we must cut expenditure,” the source said, adding that the reduced shareholding is not an indication of Kenya’s lower support to the bank.

“Kenya pledged a significant amount during the 17th replenishment of the AfDB Fund, our concessional lending arm, and that must have encouraged several African countries to contribute to the Fund for the first time,” he said.

He added that Kenya is one of the countries that want to increase their shareholding at the bank.

“I know we can temporarily lose the shares, but we will get them back, if you look at it in the long term,” he added.

Kenya’s shareholding at the AfDB jumped dramatically in 2019, more than doubling from 93,610 or 1.447 percent, to 204,481, or 2.068 percent, but started faltering in 2022 at the peak of global macroeconomic disruptions.

The decline comes at a time President William Ruto has expressed commitment to increase Kenya’s shareholding in African multilateral financiers through capital injections. He says that will strengthen their ability to finance African solutions.

When he hosted the AfDB annual meeting in May 2024, President Ruto said the government would inject more capital in AfDB, the Trade and Development Bank (TDB) and the Africa Export-Import Bank.

Last year, Kenya injected an additional $100 million (Sh12.9 billion) in TDB and $50 million (Sh6.5 billion) in Afreximbank, but is yet to put more in the AfDB as promised.

In recent years, Kenya has increased reliance on the multilateral lender for loans, rising to become the bank’s third-largest recipient of debt disbursements in 2025 and displacing Nigeria.

In the region, only Tanzania increased its shares at the institution, while others like Uganda, Burundi, Rwanda and South Sudan saw their shareholding decline. Somalia’s has remained constant.