The World Bank Board has approved the disbursement of a
Ksh. 106.7billion ($1 billion) loan to Kenya from its Development Program
Operations (DPO) kitty.
Confirming the new
loan, Kenya's Treasury Cabinet Secretary, Ukur Yatani, said the newly acquired funds will be channelled
towards budgetary support.
“World Bank Board gives
full approval to Kenya’s DPO of $1 billion. This is the largest DPO we’ve ever
received. The fact that World Bank does not provide budget support to countries
with weak macro-framework is a testimony of the confidence levels of the bank
in our new policy reforms,” He said in a tweet.
The new facility from
the multilateral lender features as direct support to government expenditures
unlike program loans which are usually attached to specific terms and conditions.
This is Kenya’s largest
windfall from the World Bank’s DPO facility on record and aligns to the
National Treasury target of replacing its appetite for external commercial
loans with cheaper concessional debt sources
Last year, the World
Bank made a similar disbursement to the exchequer to the tune of Ksh.
80billion.
Earlier
this month, the IMF lent out a similar Ksh. 78.9billion direct loan to Kenya
via its rapid credit facility (RCF) with the funds expected to cater for the
country’s urgent balance of payment needs stemming from the Covid-19 pandemic.
The National Treasury
has been banking on its development partners to meet its expenditure needs as
tax revenues shrink from economic disruptions brought forth by the global
health emergency.
Total revenues in
nine-months through July to March 2020 were for instance shy of the target by
over Ksh. 200billion.
The National Treasury expects further flows totalling to another Ksh. 107billion ($1 billion) from the European Union (EU). - CitizenTV
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