Kenya seeks $750 million World Bank loan for budget support

If the loan gets approved, it will be the first time in years the World Bank will inject funds directly into Kenya’s Treasury
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Kenya is negotiating with the World Bank for a $750 million loan for budgetary support, documents on the proposed funding posted on the lender’s website showed on Tuesday. 

The country has multiple development funding programmes, worth billions of dollars, with the Washington-based lender, but the funding bypasses the Treasury and is usually channelled straight into the projects.

If the $750 million loan gets approved, it will be the first time in years the World Bank is injecting funds into the Treasury to be used at the government’s discretion.

The loan, which comes under the bank’s development policy financing, is designed to support the government’s policy and institutional reforms and making economic growth more inclusive.

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The World Bank declined to comment as the loan is yet to be approved by its board. 

Kenya raised $2.1 billion in a sovereign bond this month, but some critics have expressed concerns over the country’s growing debt burden.

There has been a leap in government borrowing since President Uhuru Kenyatta came to power in 2013.

The government has defended the increased borrowing, saying the country must invest in its infrastructure, including roads and railways.

Finance Minister, Henry Rotich aims to bring down debt servicing costs in the next few years to 12-16%.

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