On November 20 in Nairobi, the World Bank announced that it envisions providing Kenya with $12 billion in support over the next three years, potentially offering significant relief to the financial challenges faced by the East African nation. The statement clarified that the specified amount is contingent upon approval from the bank’s executive directors and considerations affecting its lending capacity. Kenya has grappled with fiscal strain due to the lingering effects of the COVID-19 pandemic and recurrent droughts triggered by climate change.
The World Bank has expressed its unwavering commitment to assisting Kenya in achieving its goal of attaining upper-middle-income status by 2030, according to the provided statement. Contingent upon the approval of new operations by the World Bank Executive Directors and factors influencing the bank’s lending capacity, this commitment translates to a comprehensive financial support package of $12 billion over the next three years.
the World Bank Country Director, clarified that the $12 billion comprises funds currently accessible to Kenya from entities such as the International Development Association, the International Bank for Reconstruction and Development, the International Finance Corporation, and the Multilateral Investment Guarantee Agency. Additionally, it includes anticipated support to be provided in the upcoming three years.
Hansen mentioned that the envisioned support is expected to encompass various initiatives, including Development Policy Operations and fresh investments spanning sectors such as energy, health, transport, and water.
Kenya has been grappling with significant liquidity difficulties, primarily stemming from uncertainties surrounding its access to financial markets ahead of the maturity of a $2 billion Eurobond in June of the coming year.
In the previous week, the International Monetary Fund (IMF) reached a preliminary agreement with Kenya at the staff level, unlocking immediate access to an additional $682 million tranche of funding. This development also bolstered Kenya’s existing lending program by an additional $938 million.
In response to recent government declarations and the staff-level agreement with the IMF, Hansen emphasized that the World Bank aims to provide clarity regarding the expected level of resources that Kenya can anticipate.
Source: Reuters