Global lender, the World Bank, has approved a $750 million (Sh75 billion) loan to Kenya for budget support, after confirming the cash flow challenge that has gripped the country’s Treasury in recent times.
The loan marks the first time in years the World Bank is putting cash straight into the Treasury to be used at the discretion of the government as opposed to the recent trend where it has channeled funds straight into projects, Business Daily Africa reported.
This reflects the worsening cash flow at the Treasury in an environment where revenues are below target amid rising debt interest payments, denying the economy cash for projects like infrastructure upgrade.
The loans, whose terms were not disclosed, will be used to support the ongoing fight against corruption and the ‘Big Four Agenda’ policy aimed at boosting economic growth by improving food security, rolling out universal healthcare, supporting manufacturing, and building affordable housing.
“Measures supported by this operation are expected to benefit ordinary Kenyans through better targeting of agricultural subsidies to reach low-income farmers, prosecuting those who engage in fraudulent procurement, increasing the availability of affordable housing, and improving revenue mobilisation,” said the World Bank in its approval notice.