The government, through the National Treasury Ministry, is in advanced talks with the World Bank for a Ksh 82 billion loan just two days after an outcry over the International Monetary Fund (IMF) loan.
In a statement, Treasury CS Ukur Yattani noted that the loan, under the World Bank’s Development Policy Operations (DPO), was needed to cover the budget deficit.
Talks are expected to be completed and funds disbursed by June 2021.
“Kenyan ministries, departments and agencies (MDA) have implemented all prior actions for consideration by the World Bank under DPO III”, read a statement from Yattani seen by Citizen television.
Treasury CS Ukur Yatani addresses media on November 25, 2020 in Nairobi
He further noted that once approved, the loan would be used to generate inclusive growth in four sectors.
These include promoting transparent spending, unlocking public-private partnerships (PPP), increasing revenues and strengthening debt management.
It comes just two days after the IMF approved Ksh 257 billion as TBEN protested rising debt levels.
A section of TBEN flooded the international lender’s Facebook page and signed an online petition with more than 200,000 signatures, an unprecedented move that even caught international media attention.
The loan will be phased over three years and reviews will also be carried out to ensure compliance.
The National Treasury has pledged to raise taxes and reduce its wage bill in order to receive the IMF loan of Ksh 257 billion.
Kenya’s external debt has since crossed Ksh10 trillion, with experts warning that the country’s debt sustainability is crossing the red line.
Logo at the entrance to the World Bank building in Washington DC, USA.