Kenya plans to secure a total of $750 million (Kes92 billion) loan from the World Bank to firm up current financial needs for the fiscal year ending June next year.
“The proposed package under discussion with the World Bank aims at promoting sustainable, resilient, and inclusive growth,” Treasury Cabinet Secretary Prof Njuguna Ndung’u said on Tuesday duringa a World Bank event in Nairobi.
Once released, the latest financial boost will be the country’s fifth loan under the World Bank’s Development Policy Operation (DPO) Framework which has seen the Bretton Woods lender wire $3.25 billion (Kes399 billion).
In November, Prof Ndungu said the country was in talks with the World Bank for new financing, without disclosing the amount involved.
“During the current IDA-20 cycle, the government has lined up additional DPO of approximately $750 million for the current financial year. The proposed package under discussion with the World Bank aims at promoting sustainable, resilient, and inclusive growth. This will promote human capital development as a major input to economic growth,” Treasury CS explained during the unveiling of the 2023-2028 Country Partnership Framework between Kenya and the World Bank.
Kenya’s new administration is seeking cheaper loans after inhering a government that ran heavily on a debt-fuelled infrastructure construction drive that left the country with little room for more debt.
According to Prof Ndung’u, the Treasury has been keen on securing $1 billion (Kes126 billion) from the World Bank under the Development Policy Operations loan plan which is usually pegged onto a pre-agreed policy area.
By adopting the DPO framework, authorities at the Treasury believe this will align well with President William Ruto’s plan to stick on a sustainable fiscal trajectory.
Previously, Kenya shunned borrowing roughly Kes105.6 billion through the issuance of a Eurobond citing high interest rates.