Kenya is in talks with the World Bank looking to acquire a $750 million (about Ksh97 billion in current exchange rates) loan, according to a report by Reuters.
Rafael Owino, the Director General in Treasury's Public Debt Management Office, confirmed this to Reuters and added that the Africa Development Bank (AfDB) is also on board to grant Kenya an additional $200 million (about Ksh26 billion in current exchange rates).
He attributed this confidence by the World Bank to the recent nod by the International Monetary Fund (IMF) following the completion of the seventh and eighth reviews on Kenya’s readiness to repay its debts.
"The World Bank is coming on board, riding on the back of IMF receipts. The AfDB is already on board,” Owino stated.
A spokesperson in the World Bank Kenya offices also confirmed to the publication that the talks were ongoing and stated that the funding would be made through a Development Policy Operations (DPO) with the government.
On October 30, the IMF completed its economic review of Kenya, concluding that the country’s economy had remained resilient, recording a growth above the regional average.
“Kenya’s economy remains resilient with growth above the regional average, inflation decelerating, and external inflows supporting the Shilling and a buildup of external buffers, despite a difficult socio-economic environment,” IMF Acting Chair Gita Gopinath stated.
This positive review opened the door for the IMF to approve the disbursement of a loan amounting to $606 million (Ksh78 billion in current exchange rates) that has been held pending the review after anti-government protests in June.
Kenya is also in talks with the United Arab Emirates (UAE) for another $1.5 million (Ksh194 billion in current exchange rates) with an interest rate of 8.25 per cent over a seven-year term.
According to Bloomberg, the terms and conditions of this loan may change as discussions continue.
This flurry of new loans comes at a time when Kenya is in dire need of funding following the downfall of the Finance Bill 2024, whose heavy taxation amounting to over Ksh346 billion prompted countrywide protests as well as the failure of the IMF to disburse the Ksh78 million loan.
Currently, the Kenyan government has set its foreign borrowing target for the 2024/25 fiscal year at Ksh168 billion.
