Kenya in talks for Ksh.82 billion World Bank loan


Kenya in talks for Ksh.82 billion World Bank loan
File Image of Treasury Cabinet Secretary Ukur Yatani. PHOTO| COURTESY

In Summary

  • In a statement issued on Wednesday, Treasury hinted talks were at an advanced stage having fulfilled part of prerequisite conditions enabling the access of the facility dubbed as the World Bank Development Policy Operations (DPO).
  • Last year, the World Bank disbursed an estimated Ksh.107 billion ($1 billion) as part of a second DPO program to cushion the local economy from vagaries arising from the COVID-19 shock.
  • Kenya will push for an extended DPO support into the next couple of years with Ksh.74.3 billion and Ksh.131.1 billion scheduled as inflows from the World Bank across the 2021/22 and 2022/23 fiscal years.
   

The National Treasury is in talks for the disbursement of a fresh Ksh.82 billion ($750 million) from the World Bank before the end of June.

The facility alluded to earlier in exchequer documents is part of external financing targeted at plugging the 2020/21 budget hole exacerbated by a shortfall in tax revenues.

In a statement issued on Wednesday, Treasury hinted talks were at an advanced stage having fulfilled part of prerequisite conditions enabling the access of the facility dubbed as the World Bank Development Policy Operations (DPO).

“Kenyan ministries, departments and agencies (MDAs) have delivered all prior actions for consideration by the World Bank under DPO III,”said the Treasury statement.

The exchequer says the facility is aimed at delivering inclusive growth and focuses on reforms in four critical sectors.

These include fiscal reforms ranging from promoting transparent spending, unlocking public-private partnerships (PPPs), enhancing revenues and strengthening debt management.

This will be World Bank’s third direct budgetary support loan in three years.

Last year, the World Bank disbursed an estimated Ksh.107 billion ($1 billion) as part of a second DPO program to cushion the local economy from vagaries arising from the COVID-19 shock.

Earlier in 2019, the World Bank disbursed Ksh.82 billion ($750 million) as Kenya re-engaged the multi-lateral lender for direct support for the first time in years.

The 2021 Budget Policy Statement published last month had foreboded the new, expected World Bank facility.

Further confessions from the document show Kenya will push for an extended DPO support into the next couple of years with Ksh.74.3 billion and Ksh.131.1 billion scheduled as inflows from the World Bank across the 2021/22 and 2022/23 fiscal years.

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Story By Kepha Muiruri
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