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World Bank approves $750 million loan for Kenya’s COVID-19 recovery

Published

3 years ago

March 18, 2022

The World Bank, in an effort to accelerate Kenya’s ongoing inclusive and resilient recovery from the COVID-19 crisis, on Thursday approved a $750 million loan for the East African country.

The fund is under the Development Policy Operation (DPO) programme of the World Bank. It is expected to strengthen fiscal sustainability through reforms that contribute to greater transparency and the fight against corruption.

According to the World Bank, its finance policy provides rapidly-disbursing financing to help a borrower address actual or anticipated development financing requirements.

“DPF supports borrowers in achieving sustainable, shared growth and poverty reduction through a program of policy and institutional actions aimed at, for example, strengthening public financial management, improving the investment climate, addressing bottlenecks to improve service delivery, and diversifying the economy”.

The Washington-based lender said the loan is on concessional terms at an interest rate of about 3%, and will help the East African nation enhance the performance of its domestic debt market, reform the electricity industry and improve governance,

“The government’s reforms supported by the DPO help reduce fiscal pressures by making public spending more efficient and transparent, and by reducing the fiscal costs and risks from key state-owned entities,” Alex Sienaert, senior economist for the World Bank in Kenya, said in the statement.

It’s the fourth time in three years that Kenya has tapped the DPO facility, bringing cumulative borrowing to $3.25bn. East Africa’s biggest economy received $750m in June last year, $1bn in May 2020, and $750m in 2019. Requests for DPOs are presented to the World Bank’s board after the implementation of agreed reforms.

Critics of the World Bank argue that its loans are a mechanism of forcing free-market economics on countries through coercion. Countries with a debt crisis, whatever their other characteristics, agree to the bank’s package of legal and economic reforms, and the bank agrees to lend them money. Argentina, Ecuador, and India have all either weakened their labour legislation or amended their land laws to qualify for an adjustment loan. India is reported to have changed 20 pieces of major legislation.

Kenya consented to a raft of measures to secure the funding, including shifting government procurement to a new electronic platform to make transactions more transparent and reduce opportunities for corruption, the lender said. By the end of 2023, the programme aims to have five strategically selected ministries, departments, and agencies procuring goods and services through the electronic platform, it said.

Related Topics:Featured Kenya World Bank

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Moroccan annual inflation rises to 0.8% in November

Published

1 day ago

December 21, 2024

Ifeoluwa Dada

Morocco’s statistics office has confirmed that the country’s annual inflation rate, as determined by the consumer price index, increased from 0.7% in October to 0.8% in November.

Monthly, consumer prices decreased by 0.2% from October.

The primary driver of inflation, food costs, grew by 0.8% compared to the previous year, while non-food inflation climbed by 0.7%. Core inflation, which does not include more erratic items like food, increased 2.6% annually and 0.2% monthly.

According to the central bank, inflation is expected to average 1% this year, down from 6.1% last year.

Despite the Al-Haouz earthquake, a spike in inflation, and worldwide economic challenges, Morocco’s GDP grew by 3.4% in 2023.

A recovery in tourism, robust industrial exports, and rising private consumption—all bolstered by prudent macroeconomic policies—were the main drivers of growth.

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Nigeria’s $42bn foreign reserves enough for 9 months’ imports— Central Bank

Published

2 days ago

December 20, 2024

Ifeoluwa Dada

According to Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), the nation’s $42.01 billion in foreign reserves can cover imports of goods and services for almost nine months.

Cardoso promised Nigerians improved economic fortunes in 2025 while addressing the Senate Committee on Banking, Insurance, and Other Financial Institutions yesterday in Abuja at the presentation of the performance index report.

Cardoso stated: “External Reserves rose from $ 38.35 billion it was on September 30, 2024, to $ 42.01 billion as of December 12, 2024”.

He clarified that third-party receipts in Q3 2024 and revenues from taxes connected to crude oil were the main drivers of the rise in foreign reserves during the specified time.

“We saw remarkable improvements in our trade balance and maintained a current account surplus,” he added.

“Our external reserves level can finance over 9.09 months of import of goods and services or 13.91 months only, higher than the international benchmark of 3.0 months and a robust buffer against shocks”.

On cash shortage, the CBN boss reiterated the N150 million fine against any branch of banks caught illegally distributing new Naira notes to currency hawkers and unscrupulous elements and said the Nigerian economy will improve in 2025 through policies and measures.

He predicted a stronger economic future: “Despite our economy’s challenges, there are clear reasons for optimism.

“The gradual stabilization of the forex market, ongoing banking sector recapitalization, and positive growth trends in key sectors, especially the services sector, indicate a path toward recovery and stability.”