The World Bank Group has announced a revised financing plan for Kenya, reducing the anticipated funding by Sh39 billion. Initially projected at Sh197 billion ($1.5 billion), the new allocation stands at Sh157.7 billion ($1.2 billion) for the current fiscal year ending in June.
Central Bank Governor Kamau Thugge had previously hinted at a significant financing boost, with expectations of $1.5 billion in March or April, as communicated by the National Treasury.
Scheduled for approval on April 30, the revised plan channels funds through the World Bank’s Development Policy Financing (DPF) framework. Aimed at enhancing efficiency, equity, and transparency in public finance, as well as strengthening Kenya’s labor market and supporting climate action, the funding targets various economic sectors.
Key objectives include generating public expenditure savings, fortifying social protection systems, combating corruption, and fostering a more competitive business environment. This includes streamlining regulatory processes, boosting vocational training enrollment, and improving access to social services for refugees and asylum seekers.
Despite the reduction in anticipated funding, the World Bank’s support remains pivotal in addressing Kenya’s fiscal deficit estimated at Sh785 billion for the 2023/24 fiscal year. Additionally, the influx of funds is expected to bolster Kenya’s foreign exchange reserves and potentially strengthen the local currency against major global currencies.
This recalibration in financing underscores the importance of strategic planning and adaptability in leveraging international support for sustainable development initiatives.
photo source: Google
By: Montel Kamau
Serrari Financial Analyst
4th April, 2024
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