World Bank approves 1 bln USD for Kenya to address COVID-19 financing gap
The World Bank announced on Wednesday that it had approved 107 billion shillings (1 billion U.S. dollars) for Kenya to address the COVID-19 fiscal financing gap, an official said.
The Bank said the fund is for budget support operation, which helps close the fiscal financing gap, while supports reforms that help advance the government's inclusive growth agenda, including affordable housing and support to farmers' incomes.
Felipe Jaramillo, World Bank country director for Kenya told journalists in a virtual meeting that the Kenya Inclusive Growth and Fiscal Management Development Policy Financing (DPF) is the second of a two-operation programmatic series aiming to recreate fiscal buffers over the medium term and crowding in private investment.
He noted that the preparation of this DPF preceded the COVID-19 pandemic, but its approval is timely since it will help to fill the financing gap generated by the severe, ongoing shock to Kenya's economy.
"COVID-19 represents an unprecedented shock to the global economy. The World Bank remains very committed to supporting our client countries in these very challenging times. This operation provides concessional resources to help Kenya navigate the current COVID-19 crisis and to cushion the impact on livelihoods and jobs while supporting the continued operation of essential public services," Jaramillo said.
To secure the financing, the east African nation has undertaken policy reforms that directly benefit many low-income Kenyan households. Smallholder farmers will now benefit from better targeting of subsidized agricultural inputs through electronic vouchers.
Jaramillo said given Kenya's classification as a lower-middle-income blend country, the one billion dollar financing comprises a 750 million dollar credit from the International Development Association (IDA) and a further 250 million dollar loan from the International Bank for Reconstruction and Development (IBRD). (Xinhua)