Amid growing discontent over Kenya’s mounting debt, the World Bank has appointied Qimiao Fan as the new Country Director for Kenya and three other East African nations. The decision comes at a critical juncture, with the lender under pressure from Kenyans including lawmakers who accuse it of reckless lending practices.
Fan’s appointment, effective from September 1, 2024, signals the World Bank’s intent to stabilise its relationship with Kenya, a nation deeply entangled in the lender’s financial web.
Why it matters: The World Bank is Kenya’s biggest lender, and the country currently owes the World Bank about Ksh1.5 trillion, with 36 ongoing projects valued at over Ksh950 billion. The bank’s new leadership is seen as a move to manage the growing scepticism surrounding the lender’s role in Kenya’s economic landscape.
The relationship between Kenya and international lenders, including the bank, has been rocky since Kenyans rejected the Finance Bill 2024, and the government, as a result announced plans to borrow Ksh1.2 trillion this year.
Dig Dipper: Fan, a seasoned development expert with over 35 years of experience, is tasked with managing the World Bank’s complex relationship with Kenya.
The lender’s reputation in Kenya has been marred by criticism, particularly over the country’s ballooning public debt, which has become a contentious issue among Kenyans, including their elected representatives. The recent approval of a Ksh27 billion loan, including a Ksh4.3 billion grant for last-mile electricity connectivity, has only heightened the scrutiny.
The World Bank, however, is not backing down from its critics. In a recent interview, the lender robustly defended its lending practices, dismissing claims that it fails to assess the proper use of its funds in Kenya.
The bank emphasised that its engagement with the Kenyan government involves a rigorous due diligence process that spans the entire lifecycle of a project—from inception to completion. This process, according to the World Bank, ensures that the projects it funds are not only viable but also meet the country’s needs.
"The World Bank and the Government of Kenya engage in a dual due diligence process that spans the entire project lifecycle, from inception to completion," the lender stated. "This process ensures that projects are robust and effectively address the country’s needs."
The lender further highlighted its role as an economic advisor to Kenya, having recently cautioned President William Ruto against frequent tax policy changes. The World Bank’s influence in shaping Kenya’s economic policies is evident, yet it remains a polarising force among the populace.
"If the GoK fails to comply with its obligations under the relevant legal agreement, the WB can exercise its remedies. These include but are not limited to the rights to suspend or cancel amounts provided under the financing," the World Bank stated.
Who is Fan?: He is a seasoned development practitioner, who brings a wealth of expertise to his new role. His extensive background includes leadership positions in diverse regions, from East Asia to South Asia and Europe. His academic credentials, including a PhD in Economics from the University of Birmingham, bolster his profile as a formidable figure in the global development arena.
Despite his impressive resume, Fan’s real test lies in navigating the turbulent waters of Kenya’s public opinion. The World Bank’s involvement in the country’s electrification programme, for instance, has been a double-edged sword.
While the initiative, supported by World Bank projects like the Kenya Electricity Expansion Project, has significantly increased access to electricity—from 25 per cent to 75 per cent of the population—its implementation has not been without flaws. An audit revealed delays and the supply of faulty equipment that led to blackouts, casting a shadow over the project’s success.
The audit also highlighted the positive impacts of the programme, including job creation, the growth of small businesses, and enhanced security. Yet, the delays in project completion have fuelled criticism, with none of the project phases completed by April 2022.
This mixed record exemplifies the challenges Fan will face as he seeks to balance the World Bank’s developmental goals with the realities on the ground in Kenya.
