President William Ruto on Monday, November 20, expressed his gratitude to the World Bank and the International Monetary Fund for their continued support in Kenya’s economic revival journey.
In a statement after meeting World Bank’s President Ajay Banga in Berlin, the President welcomed the commitment by both institutions to avail funds amid the recent challenges facing Kenya.
According to him, the over Ksh1 trillion once approved will help in building buffers and enhance resilience efforts amid the external shocks rocking Kenya’s economy.
In addition, the President noted that the funding will help to accelerate the Bottom-Up Economic Transformation plan by his administration as well as tame inflation and debt vulnerabilities.
“We are especially grateful to the Institutions for their latest assistance — KSh1.8 trillion and Ksh687 billion, respectively — which will rebuild our buffers, tame inflation and debt vulnerabilities,” Ruto stated.
World Bank commits to supporting Kenya
His statement came hours after the World Bank announced its intentions to extend Ksh 1.2 trillion to Kenya in a span of three years.
The multinational lender had in a statement affirmed its commitment to supporting Kenya in its quest to become an upper middle-income economy by 2030.
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As per the statement, the Bank will provide the funds in various forms including fast-disbursing operations, investments, and guarantees.
“Out of this amount, $3 billion is estimated from IDA and $1.5 billion from IBRD,” the World Bank statement.
“IFC will provide roughly $1 billion in investments and MIGA guarantees can amount to around $500 million.”
However, the Ksh1.2 trillion funding is still subject to the World Bank Executive Directors approval of new operations, and factors which may affect the Bank’s lending capacity.
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IMF funding
The news about World Bank’s imminent funding came days after the International Monetary Fund (IMF) announced a staff-level agreement to expand a loan facility to Kenya by Ksh142 billion.
In a statement on Friday, November 17, IMF detailed that Kenya would have an immediate access to Ksh95 million if the agreement is approved by the IMF board as well.
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The fundings would present a much-needed relief for Kenya which is staring at a murky road ahead posed by the prevailing economic conditions and a mega Eurobond credit set for maturity in 2024.
Lately, the President has decried in public that over 60% of government’s revenue is spent on servicing debt- and hence plunging the government into a constrained position.
