Close

World Bank Approves $750 Million for Kenya’s Economic Recovery

Nairobi, the only city in Africa that made the top 45 global cities that posted growth in 2021, Prime Global Cities Index by Knight Frank

Nairobi, Kenya - PSCU

The World Bank has approved $750 million lending to Kenya to t to sustain its strong economic growth performance.

The funding is the second under the Development Policy Operation (DPO) initiated in 2020 that provides low-cost budget financing along with support to key policy and institutional reforms.

“The government’s reforms supported by the DPO help reduce fiscal pressures by making public spending more efficient and transparent, and by reducing the fiscal costs and risks from key state-owned entities,” Alex Sienaert, senior economist for the World Bank in Kenya, said in the statement.

This is the fourth time in three years that Kenya has tapped the DPO facility, bringing cumulative borrowing to $3.25 billion.

“By the end of 2023, the program aims to have five strategically selected ministries, departments, and agencies, procuring all goods and services through the electronic procurement platform,” the bank said in a statement.

The program will support the infrastructure sector, measures will create a platform for investments in least-cost, clean power technologies, and enhance the legal and institutional setup for PPPs to attract more private investment.

Kenyans will also benefit from better management of natural and human capital. 

The DPO also supports Kenya’s capacity to handle future pandemics through the establishment of the Kenya National Public Health Institute (NPHI), which will coordinate public health functions and programs to prevent, detect, and respond to public health threats, including infectious and non-infectious diseases, and other health events.

“The government of Kenya has maintained the momentum to make critical reforms progress despite the disruption caused by the pandemic,” said Keith Hansen, country director for Kenya.

“Upon receipt of the USD 750.0 million n (Kshs 80.9 billion), Kenya’s external debt is expected to increase by 1.9 percent to Kshs 4.3 trillion, from Kshs 4.2 trillion and the total debt to Kshs 8.1 trillion from 8.0 trillion, as of December 2021. As a result, the public debt to GDP ratio will increase by 0.7% points to 66.9%, from 66.2 percent in December 2021, and will be 16.9 percent points above the International Monetary Fund (IMF)’s recommended threshold for developing nations, which is capped at 50.0 per cent,”  Cytonn Investments.


Khusoko is now on Telegram. Click here to join our channel and stay updated with the latest East African business news and updates.

 

 

IK is a Masinde Muliro University graduate. His interests are in news and analysis on women's rights, politics, technology, law, and global affairs.

3 Comments
scroll to top