World Bank gives Kenya US$750m for COVID-19 recovery

KENYA – The government of Kenya has received US$ 750 million from the World Bank to reinforce its resilient, inclusive green economy recovery from the COVID-19 crisis.

The World Bank approved this development policy financing to support policy reforms that will strengthen transparency and accountability in public procurement and promote efficient public investment spending.

The support will enable Kenya to improve its medium-term fiscal and debt sustainability through greater transparency and efficiency in government spending, building on ongoing World Bank support to enhance public finance management systems.

The operation provides for the establishment of an electronic procurement platform for the public sector that seeks to make government purchases of goods and services transparent.

The support also strengthens public investment management by seeking cost savings and applying rigorous selection, monitoring and evaluation criteria to all projects. Both measures are expected to yield financial savings of up to US$ 2.6 billion.

“The operation priorities reforms in the had hit sectors such as healthcare, education and energy, which have been made urgent by the impact of COVID-19 crisis,” said Keith Hansen, World Bank County Director for Kenya.

He said that in recognition of the severity of the crisis and the need for a comprehensive response, the World Bank supports the government’s post-COVID-19 economic recovery strategy, which is designed to mitigate the adverse socio-economic effects of the pandemic accelerate economic recovery and sustained growth.

”This development policy operation supports measures to improve medium-term fiscal and debt sustainability through greater transparency and efficiency in government spending,” the international lender said.

He added that in recognition of the severity of the crisis and need for a comprehensive response, World Bank is supporting the government’s post-Covid-19 Economic Recovery Strategy, which is designed to mitigate the adverse socioeconomic effects of the pandemic and accelerate economic recovery and attain higher and sustained economic growth.

“The operation priorities reforms in the had hit sectors such as healthcare, education and energy, which have been made urgent by the impact of COVID-19 crisis”

Keith Hansen – World Bank Country Director, Kenya

Further, the new policy framework will help strengthen Kenya Power and Lighting Company’s (KPLC’s) finances with a new competitive pricing regime.

Kenyans will also benefit from better healthcare and disease prevention, especially for the poorest and most vulnerable households, through National Hospital Insurance Fund (NHIF) governance reforms and the establishment of the Kenya Centre for Disease Control (KCDC) to strengthen disease prevention, detection, and response.

Reforms will further seek to provide Kenyans with more equitable access to higher education, through a performance-based funding method to reduce the imbalances and inefficiencies created by the existing funding model for universities.

DPOs are used by the World Bank to support a country’s policy and institutional reform agenda to help to accelerate inclusive growth and poverty reduction.

The negative impacts of the Covid-19 crisis have made reforms that improve governance and service delivery, including those covered by this operation for Kenya, even more critical because they create better conditions for Kenya to recover from it inclusively and sustainably.

Financing provided by the World Bank is offered by on concessional terms, making it significantly lower than commercial loans.

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