Kenya is on the verge of receiving a Ksh.92 billion ($750 million) loan from the World Bank Group as it seeks to secure low-cost financing.
On Tuesday, Treasury Cabinet Secretary Prof. Njuguna Ndung’u revealed that the government was in advanced talks for the loan disbursement, despite the fact that the facility’s value fell short of the government’s expectations of accessing Ksh.122.7 billion ($1 billion).
“The proposed package under discussion with the World Bank aims at promoting sustainable, resilience and inclusive growth. That will also promote human capital development as a major input to economic management,” he said.
“The current preoccupation by the current administration is to enact innovative solutions for liability management that will also signal active public debt management and sustainability.”
The sought-after facility is part of the World Bank’s Development Policy Operations (DPO) and would be Kenya’s fifth over a five-year period.
Loan payments are expected to begin before the end of June 2023.
Kenya has spent Ksh.398.8 billion ($3.25 billion) under the previous four DPOs since 2019.
In the larger scheme of things, the anticipated financing is supported by the new World Bank Country Framework for Kenya, which was launched on Tuesday and covers the fiscal years 2023 to 2028.
The World Bank’s multi-year support program’s first goal is to assist Kenya in re-creating fiscal space that has deteriorated due to rising debt service, the COVID-19 pandemic, climate shocks, and global headwinds.
“The program will include development policy financing to help accelerate fiscal and investment climate reforms and lower Kenya’s borrowing costs,” noted the new CPF report.
The framework also includes the International Finance Corporation’s (IFC) steady scaling of investments and guarantees from the Multilateral Investment Guarantee Agency (MIGA), an entity that offers political risk insurance and credit enhancement guarantees.
