The World Bank has approved a Sh87.76 billion loan to Kenya for budgetary support.
The loan whose annual rate will be three percent is the second tranche from World Bank’s Development Policy Operations.
However the facility which directly lends cash to the National Treasury gave a condition to the state to undertake reforms in public procurement to end corruption.
“Kenya has maintained the momentum to make critical reforms progress despite the disruption caused by the pandemic,” said World Bank Country Director for Kenya Keith Hassan.
“The World Bank is pleased to support these efforts which are positioning Kenya to sustain its economic growth and performance and steering it towards inclusive and green development,” he added.
According to the World Bank, the funding seeks to steer the establishment of an electronic platform for public procurement to foster transparency in a bid to end corruption.
The programme aims to have five ministries, departments, and agencies buying goods and services through the electronic platform by the end of 2023..
The loan targets measures to create a platform for investments at a cheaper cost and enhance the legal and institutional setup for public-private partnerships to attract more private investment in the infrastructural sector.
“Aligning clean energy investments to demand growth and ensuring competitive pricing through a transparent, competitive auction-based system has the potential to generate savings of about $1.1 billion over ten years at current exchange rates,” noted World Bank.
The Kenya National Public Health Institute will also be established to coordinate functions and programmes to prevent, detect, and respond to public health threats, including infectious and non-infectious diseases, and other health events.
“The government’s reforms supported by the DPO help reduce fiscal pressures by making public spending more efficient and transparent, and by reducing the fiscal costs and risks from key state-owned entities,” said Mr Alex Sienaert, a senior economist with the World Bank in Kenya.
“In addition, strong and sustainable growth is essential to achieve medium-term fiscal consolidation and to reduce the debt burden and related risks. The package includes measures to spur more private investment and growth, whilst strengthening the management of Kenya’s natural and human capital which underpin its economy,” he added.