Ruto Breaks His Campaign Promise, Moves To Secure Ksh92 Billion World Bank Loan

Kenya is requesting a World Bank budget support loan of Ksh92 billion ($750 million).

The loan facility, according to National Treasury Cabinet Secretary Njuguna Ndung'u, will help cover the government's funding needs for the fiscal year ending June 30, 2023.

Prof Ndung'u stated that the government was seeking more money from the World Bank during the launch of the World Bank's Country Partnership Framework for 2023-28 in Nairobi on Tuesday, December 6.

"We tried to negotiate it down to Ksh122.75 billion ($1 billion), but the World Bank was adamant," Ndung'u explained.

Ndung'u stated in November that Kenya was in talks with the World Bank about new financing, without specifying the amount.

"The proposed package under consideration with the World Bank aims to promote sustainable, resilient, and inclusive growth," Ndung'u said at the World Bank event.

Kenya's request for the new facility comes nine months after the lender extended a similar amount to help accelerate the ongoing inclusive and resilient recovery from the pandemic's economic crisis.

The World Bank approved Ksh92 billion in March 2022 as part of the Development Policy Operation, which aimed to contribute to greater transparency and the fight against corruption.

After his predecessor, Uhuru Kenyatta, left the country with high-interest commercial debt, President William Ruto has stated that he is looking for alternative and less expensive loans.

This is despite the fact that interest rates in the domestic debt market can reach as high as 14%.

The lending instrument under consideration with the World Bank, according to the Treasury CS, is a Development Policy Operations loan, which is typically tied to a pre-agreed policy area.

Kenya qualified for this type of financing in 2019, and it has received four such loans since then, the most recent in March.

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