Kenya has secured Kshs. 85.5 billion from the World Bank in what the lender says will help support the country’s post-pandemic economic transformation.
The low-cost Development Policy Operation will fund fiscal and debt reforms to make spending more transparent and efficient, and enhance domestic debt market performance.
World Bank Country Director for Kenya Keith Hansen has said the loan will also be channeled towards the power sector by investing in efficient, green energy as well as boost private infrastructure investment through Public Procurement Partnerships.
“The Government of Kenya has maintained the momentum to make critical reforms progress despite the disruption caused by the pandemic. The World Bank, through the DPO instrument, is pleased to support these efforts which are positioning the country to sustain its strong economic growth performance and steering it towards inclusive and green development,” said Keith Hansen, World Bank Country Director.
The DPO will further strengthen the governance framework of Kenya’s natural and human capital which includes the environment, land, water, and healthcare, the lender said.
Kenya Keen on World Bank Fund to Combat Corruption.
The financing is also expected to seal corruption loopholes and enhance fiscal management reforms by shifting public procurement to a new electronic platform ensuring transparency in the tendering process.
Five strategically selected ministries, departments, and agencies, procuring all goods and services through the electronic procurement platform are being targeted by end of next year.
“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. In addition, strong and sustainable growth is essential to achieve medium-term fiscal consolidation and to reduce the debt burden and related risks. The package includes measures to spur more private investment and growth, whilst strengthening the management of Kenya’s natural and human capital which underpins its economy,” said Alex Sienaert, Senior Economist for the World Bank in Kenya.
The total annual interest cost of the Kenya DPO is approximately 3.0%.