The World Bank has approved the Sh75 billion loan request for Kenya, further raising the country’s debt.
On Wednesday, the lender said the loan facility will support critical reforms that will enhance competition and market transparency, reduce corruption opportunities in agriculture, and help Kenyan farmers to achieve higher productivity and increase their incomes.
“Reforms supported by the facility include better targeting of subsidies for agricultural inputs to reach the intended beneficiaries (using e-vouchers and biometric digital identification); reducing inefficiencies and leakages in the procurement and marketing of fertiliser; and establishing a warehouse receipt system and a commodities exchange to help farmers get easier access to credit and to reduce post-harvest losses,” the World Bank said in a statement.
The lender also said the loan will support the advancement of digitisation through the creation of the national digital ID and pushing for access of Internet services to all Kenyans.
“The facility will enhance service delivery by the government to its citizens and reduce the need for face-to-face interactions and corruption opportunities.”
The Kenyan Treasury wrote to the World Bank in March seeking an urgent loan for budget support. Kenyan leaders do not see the additional money as extra debt.
“It doesn’t add to debt because we canceled some projects”, says Treasury Cabinet Secretary Henry Rotich. “If a project is slow moving and say there are other challenges, instead of losing the money, let us convert them into budgetary support and implement,” he added.
“This is a development policy operation by the World Bank. It is being given to many countries. Yes, it is budgetary support but we have had to sacrifice our own projects so as to turn it into budgetary support,” Mr. Rotich said.