Gov’t Borrows Additional Ksh92 Billion World Bank Loan

Treasury CS Prof Njuguna Ndung’u PHOTO/Courtesy

Kenya is seeking a Ksh 92.1 billion loan from the World Bank Group.

A report on Nation indicated that the government is expected to secure the the concessional loan before the end of June 2023.

The new development was announced by Treasury CS Prof Njuguna Ndung’u while speaking during the launch of the 2023 – 2028 Country Partnership Framework between the government and World Bank.

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“During the current IDA-20 cycle, the government has lined up an additional DPO of approximately $750.0 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 also promote human capital development as a major input to economic growth,” CS Njuguna said.

The loan is part of Ksh 280.7 billion earmarked for external borrowing.

CS Njuguna noted that the government had been negotiating for a Ksh 126 billion financing package but the World Bank was committed to offer Ksh 92 billion.

In June, WoK reported that Kenya loan from World Bank had hit Ksh 138 billion.

Kenya took KSh 137.93 billion in four months to April in a bid to meet the KSh KSh 1 trillion budget deficit.

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The loan borrowed from World Bank and rich countries is part of KSh the KSh 433.1 billion that the Treasury is seeking from external lenders.

According to documents presented in Parliament, six out of the nine loans are from the World Bank while the rest were from Germany, Italy and France.

In the documents signed by former Treasury CS Ukur Yatani, the loan was procured between January and April to meet the KSh 1.4 trillion fiscal deficit in the 2020/22 budget.

On March 18, Treasury procured KSh 60.2 billion from the International Development Association (IDF) to support Kenya Power investment.

On the same day, another loan totaling about KSh 26 billion was procured from the International Bank for Reconstruction and Development (IBRD) to support Kenya Power towards the green energy path.

The government also borrowed KSh 15.3 billion and KSh 15.7 billion to keep young girls in school and increase water supply in Mombasa and Kwale respectively.

It also took an additional KSh 10.5 billion loan from IDA to boost SMEs after the COVID-19 pandemic and increased access to financial services.

The two banks are directly tied to the World Bank.

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