The World Bank has sanctioned $1.2 billion in funding to bolster Kenya’s economic growth amid external challenges.
This development policy-operation loan (DPO) aims to enhance foreign-exchange reserves in preparation for a $557 million eurobond repayment due on June 24.
Additionally, the loan will help fill gaps in Kenya’s budget, which is falling short of tax-revenue targets, and further support the Kenyan shilling, currently the strongest-performing currency against the dollar this year.
The World Bank noted that this funding is “the first in a series of three,” prepared under a more favorable macroeconomic environment. Recent government measures have tackled issues such as liquidity pressures, low investor confidence, and limited capital inflows, which had caused the shilling to depreciate rapidly.
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Key reforms under this initiative include the creation of a Treasury single account, consolidation of the wage bill, modernization of the social protection system, opening the ICT sector to more foreign investment, and improving services and job access for refugees.
The funding comprises $850 million from the International Bank for Reconstruction and Development, $300 million from the International Development Association, and a $50 million grant for refugee support.
This marks the sixth time Kenya has utilized the World Bank facility, borrowing a total of $4.25 billion since 2019.
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