US sanctions reach a Rwandan ministry and lender, Kenya inflation hits 7.3%, Uganda's shilling slides and Ethiopia shows off Russian jets.

Two bills came due in East Africa this week, one for war and one for fuel. Washington sent the first to Kigali, sanctioning Rwanda's defense ministry and the savings bank that serves its soldiers, which turns the Congo war into a compliance question for every bank that clears dollars for Rwanda. Ethiopia showed off 12 Russian fighter jets in Moscow while fighting on its southern border pushed up to 50,000 people into Kenya and its next IMF tranche looks smaller and later. The fuel bill landed in Nairobi and Kampala: Kenya's inflation reached 7.3%, its highest since July 2023, and Uganda's shilling kept sliding even after a 12% policy rate. Tanzania had the week's rare piece of supply news, a gas find that could flow as early as November. The common thread is the cost of money. Security spending and imported fuel are both paid in dollars, and the region is short of them.

What happened. On Oct 28 the US Treasury's Office of Foreign Assets Control (OFAC) designated Rwanda's Ministry of Defence and Zigama Credit and Savings Society, which the State Department describes as a financial institution that serves Rwanda's security services. Treasury says Zigama paid suppliers "in China and other countries" for army weapons and equipment, helped move gold from rebel-held Congo to Kigali, and handled M23 and AFC transactions "amounting to tens of millions of dollars". Treasury Secretary Scott Bessent said: "Rwanda must halt its support for M23 and withdraw its troops from eastern DRC."

Why it matters. This is the first US designation of a Rwandan ministry and of a regulated Rwandan deposit-taker, and it escalates the March 2 action on the Rwanda Defence Force. The block covers any entity that the two designees own 50% or more, and any dollar payment involving them that passes through the US. Treasury's release lists no general licenses. That puts the burden on banks. Any lender clearing dollars for Rwandan counterparties now has to check for Zigama ownership and links, and payroll or pension flows that touch Zigama carry dollar-clearing risk. Non-US banks are not barred outright, but they risk penalties if they cause a US bank to process a blocked payment. The value of blocked assets has not been disclosed.

The Kenya National Bureau of Statistics (KNBS) said inflation rose to 7.3% in October from 6.8% in September, the highest reading since July 2023. Transport prices were up 17.1% from a year ago and food 10.2%. Pump prices did the damage: petrol rose from Ksh214.95 to Ksh227.85 a liter in the month and kerosene jumped 14.7% to Ksh220.88, the fuel poorer households cook with.

Inflation now sits 0.2 points below the 7.5% top of the government's target band. The Central Bank of Kenya (CBK) rate is 8.75%, so the real policy rate has shrunk to about 1.45 points. The bill market shows investors shunning longer bills: the one-year Treasury bill was only 59.07% covered at the latest auction, its third miss in a row, while the 91-day bill drew 507.90%. The shilling is steady at 129.95 to the dollar, so this is imported fuel inflation, not a currency story. Savers lose real return and the Treasury is pushed to borrow short. The CBK has not yet posted its December meeting date.

Finance Minister Henry Musasizi told Parliament on Oct 27 that the shilling has weakened from about Shs3,604 per dollar in March to around Shs4,500 in late October, roughly a quarter more shillings for every dollar. "Our concern as Government is not only the depreciation of the Shilling but also its speed," he said, and asked Ugandans to stop panic-buying dollars. Permanent Secretary Ramathan Ggoobi said planned spending was cut by almost Shs3tn in the second quarter.

The Bank of Uganda (BoU) has already raised its rate from 9.75% to 12% on Oct 14 and lifted the cash reserve requirement to 13.5%. It told banks on Oct 22 it was "on the sell side" of the dollar market, without saying how much, after President Yoweri Museveni said of dollar sales: "I don't agree with that, it's not correct." The BoU mid-rate closed at 4,301.90 that day. On Oct 23 the market touched Shs4,500 before trading at Shs4,404. The root cause is a current account deficit that widened to $4.6bn in the 12 months to August, on oil, freight and weaker coffee prices. Reserves were $6.7bn, or 3.7 months of imports, at the end of June, before most of the slide. For investors, the government says it stays "committed to a market-determined exchange rate", but that is a policy on the price, not a rule on transfers. Shilling assets now buy about a fifth fewer dollars than in March.

Prime Minister Abiy Ahmed said in Moscow on Oct 28 that Ethiopia has received 12 Su-35 fighter jets, "a year ahead of schedule", and will get four S-400 air-defense batteries, with no date or price given. Eritrea's President Isaias Afwerki was at the same summit. Abiy's account is the only source for the delivery.

At home, fighting between Somali and Oromia regional forces around Moyale, which began after a Somali regional flag went up in the shared town on Oct 20, has pushed up to 50,000 people into Kenya, said Fatima Mohammed-Cole, the UN refugee agency (UNHCR) representative in Kenya, citing local authorities. The count was 36,000 a day earlier. Kenya has sent troops to Marsabit. Reporter Amharic reported more than 60 civilians killed in Arsi around Oct 24, a story we found in no English wire. And on Oct 28 Sudan's army-aligned government accused Ethiopia of letting drones launch from Bahir Dar, a party-stated claim Ethiopia did not answer.

The money side is the problem. Ethiopia's sixth IMF review has slipped to a Board decision in 2027, and the next tranche is reportedly cut to about $208m from about $259m (Rio Times citing The Reporter, single-sourced). Arms announcements alongside a shrinking IMF tranche make bondholder talks harder, and northern Kenya now carries a refugee load the budget did not plan for.

Operator Maurel & Prom said on Oct 22 that its Kasa-1X side-track at Mnazi Bay found about 200 billion cubic feet (bcf) of gas gross, with first production possible "as early as November 2026" at up to 50 million cubic feet a day. Energy Minister Juma Zuberi Homera put the find at 223 bcf on Oct 27 and called it the first since 2015. The same week the state oil company, the Tanzania Petroleum Development Corporation (TPDC), was awarded four new exploration blocks.

This is domestic gas, not export gas. More than 80% of Mnazi Bay output feeds power plants of the state utility TANESCO, and Maurel & Prom sold its Tanzanian gas at an average $4.13 per million British thermal units this year. So the real credit risk is TANESCO's ability to pay, and the upside is cheaper power in place of imported fuel, the same fuel bill hurting Kenya and Uganda. The separate $42bn LNG project led by Equinor and Shell is still aiming to finalize agreements "in the coming months", per Reuters. That is a plan, not a commitment.

■  DR Congo's National Assembly re-adopted the referendum law 346-0, with one abstention, on Oct 23. It returns to the Senate (ACP, French).

■  The UN political mission in Somalia closes on Oct 31 with the election dispute unresolved. President Hassan Sheikh Mohamud has called talks for Nov 14-18, first reported in Somali by Goobjoog.

■  A UN commission warned of a "constitutional coup" in South Sudan ahead of the Dec 22 election, with Riek Machar still detained (Radio Tamazuj).

■  Tanzania marked a year since its election under heavy policing. Activist Twaha Mwaipaya was abducted near Nairobi on Oct 25, and Tundu Lissu's treason verdict is due Nov 6 (Africanews, The Standard).

■  Uganda's ruling party leadership heard a succession paper on Oct 27, reportedly making the case for Gen. Muhoozi Kainerugaba (Nile Post, unconfirmed).

■  Ukrainian intelligence says 699 Burundians joined Russia's army this year, against 30 last year (Bloomberg, unconfirmed). Burundi's President Évariste Ndayishimiye co-chaired the Russia-Africa summit as AU chair.

■  Ebola: DR Congo has recorded 10,141 confirmed cases and 4,928 deaths (ECDC, Oct 28). Kenya has 9 cases and 2 deaths, up from one death in our Oct 23 edition, with no new case since Oct 20. Uganda ordered a 21-day quarantine for citizens returning from Congo.

■  Rwanda filed a $386m counterclaim against Korea's KT at the Permanent Court of Arbitration, answering KT's roughly $152m demand over KT Rwanda Networks (KT Press, party-stated).

■  Bayern Munich and Ajax will open Nairobi's 60,000-seat Raila Odinga stadium on Jan 5, 2027, a test run for AFCON 2027, with tickets on sale Nov 5. Only Swahili-language Mwananchi carried it so far.

OFAC Office of Foreign Assets Control, the US Treasury unit that runs sanctions · M23 Rebel group that holds parts of eastern DR Congo, allied with the AFC political front · CBK Central Bank of Kenya · BoU Bank of Uganda, the central bank · TPDC Tanzania Petroleum Development Corporation, the state oil and gas company · bcf Billion cubic feet, a measure of gas volume

A 12% rate would normally pull dollars in. In Uganda it has not, because the problem is a $4.6bn current account gap, not a shortage of yield. Kenya and Rwanda sit at 8.75% and Tanzania at 6.25%.

■  OFAC. Rwanda's Ministry of Defence and Zigama Credit and Savings Society are blocked, plus any entity they own 50% or more, alone or together. Effective Oct 28, no general licenses listed (Treasury).

■  Dangote and Kenya Pipeline. 24.76% for about KSh42.5bn. Treasury Cabinet Secretary John Mbadi defended the sale. The reported $1.5bn pipeline expansion is not yet confirmed.

■  Quickmart IPO. The Nairobi offer closed Oct 30, with the UK's MOBILIST and the IFC each committing about Sh1.94bn as cornerstones (Business Daily, The Standard). Results Nov 6, listing Nov 12, per press reports.

■  Ethiopia and the IMF. Talks on Treasury bill rules and the sixth review are set for November, Board in 2027 (The Reporter, Amharic). Public debt is projected at 45.3% of GDP.

■  FATF. The Paris plenary closes Oct 30. Kenya, DR Congo and South Sudan were on the June grey list. The outcome was not published when we went to press.

Nairobi's new stadium at Talanta Sports City opens on Jan 5, 2027 with Bayern Munich against Ajax, per Mwananchi. It is a dress rehearsal for AFCON 2027, which Kenya, Uganda and Tanzania co-host from June 19 to July 17. For a region short of dollars, a tournament that brings foreign fans and broadcast money is one of the few inflows a government can schedule.

That's the week. Back next Friday. Reply to this email, we read everything. If Rwanda is on your radar, our sister edition Kilwa Rwanda publishes the same day. Our record over the past 30 days: Errors 0 · Late 0 · Omissions 0.

Kilwa East Africa · Friday, October 30, 2026 · Vol. 1 · No. 3 · Week 44

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Kilwa East Africa is produced by the Kilwa Research team from sources in English, Swahili, Amharic, Somali, French, Kinyarwanda and Tigrinya. Figures carry their source and date, and unconfirmed reports are labeled. Kilwa Technologies is a research and data company, not an investment adviser. Nothing here is investment, legal or tax advice. kilwa.io