Kenya has received $750 Million Credit for its Economic Recovery from the World Bank.
Kenya intends to deploy the funds on reforms in the field of governance and expansion of electricity supply and recover from the disruptive effects of the pandemic as well as boost public finances.
The development policy operation loan, or DPO, will help Kenya strengthen its fiscal sustainability through reforms that contribute to greater transparency and the fight against corruption, said the World Bank in a statement this Thursday.
“The World Bank provides this loan on concessional terms, making it significantly lower than commercial loans. The total annual interest cost of the Kenya DPO is approximately 3.0%,” it said.
“The Government of Kenya has maintained the momentum to make critical reforms progress despite the disruption caused by the pandemic,” said Keith Hansen, World Bank Country Director for Kenya.
“The World Bank, through the DPO instrument, is pleased to support these efforts which are positioning Kenya to sustain its strong economic growth performance and steering it towards inclusive and green development,” added Hansen.
Kenya’s reforms supported by the DPO help reduce fiscal pressures by making public spending more efficient and transparent and reducing the fiscal costs and risks from critical 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 underpin it’s economy,” said Alex Sienaert, Senior Economist for the World Bank in Kenya.
The World Bank uses dPOs to support a client country’s ambitious policy and institutional reform plan to boost growth and lower poverty levels. The Bank approves about 40-50 DPOs globally each year.
This is the fourth time in three years that the East African nation has tapped the DPO facility, bringing cumulative borrowing to US$3.25 billion.
The East Africa’s most powerful economy received the last funding of $750 million in June 2021 compared to the previous $1 billion in May 2020 and another $750 million three years ago.
Requests for
DPOs are approved by the world bank’s board after the country fulfils agreed policy reforms.
For instance, the World Bank expects Kenya to place five strategically selected ministries, departments, and agencies procuring goods and services through the electronic platform by 2023.
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