President William Ruto yesterday agreed to implement the World Banks tough financing conditions in return for additional cheap loans from the global financier.
Dr Ruto asked for significant capital injection into the International Development Association (IDA), the World Bank Groups development finance institution, which offers cheap loans and grants to poor countries, notably in African countries including Kenya.
Loans from the World Bank come with conditions that range from budget cuts to additional taxation and freeze in public sector pay and hiring.
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He cited Kenyas devastating floods and the severe drought affecting Southern African nations such as Malawi.
Heavy rains which have been pounding the country since mid-March have caused flooding, killed over 120 people and postponed the opening of schools.
Flash floods yesterday killed over 60 people, left dozens missing and cut off a major road in Mai Mahiu area.
World Bank President Ajay Banga promised to cut down burdensome rules that govern lending to nations under the IDA to make it more efficient and to deliver funds to borrower nations faster.
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We believe a simpler and reimagined IDA can be deployed with more focus to make a meaningful impact, he said.
Kenya has been a top beneficiary of funds from the IDA despite not being ranked as a low income country, using the funds for budget support amidst difficulties in accessing money in international capital markets.
The country's loans from the IDA approached Sh2 trillion at the end of January, having stood at Sh1.816 trillion compared to Sh528.5 billion a year prior, the National Treasury said.
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Kenya ascended to become the fourth largest borrower from the IDA behind Pakistan, Bangladesh and Tanzania as at June last year.
Last year, the World Bank noted that Kenya was accessing about $2 billion (Sh266.6 billion) in concessional funding each year from the IDA and International Bank for Reconstruction and Development (IBRD).
Kenya to get more loans as IMF extends limit increase The extension will allow countries such as Kenya access to more IMF financing. World Bank cuts expected Kenya financing by Sh39bn New funding to be approved on April 30 in a revised World Bank plan. Ruto borrows more than Uhuru, Kibaki despite collecting more in taxes Despite collecting more through increased taxes and borrowing, development still lags. MSMEs sector outlook: Context, policy and perspectives for growth Micro, small and medium enterprises occupy a very strategic position in the development of Kenya Companies that pocketed Sh4.3 billion in Africa Climate Summit Dollar-denominated funds were paid by the donors directly to the contracted companies.Its free!
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