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BY NAMULONGO PETER,NAIROBI,20TH MAY 2020-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, Treasury CS 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).