The National Assembly on Tuesday approved and adopted the President's reservations on the Conflict of Interest Bill that had, among other things, delayed Kenya's access to budget support financing by the World Bank.
President William Ruto referred the Conflict of Interest Bill No.12 of 2023 back to the House on May 2 this year, with a memorandum on areas he felt needed tightening.
According to the global multilateral lender and Treasury Cabinet Secretary John Mbadi, the bill was part of the requirements the World Bank had placed on Kenya for further loan and development support.
The World Bank had made the passage of the Conflict of Interest Bill a key condition for releasing approximately Ksh97 billion (USD750 million) in funding.
This legislative requirement was part of a broader set of governance reforms that enhanced transparency and accountability within the Kenyan government, set by the Washington-based lender.
The watering down of the Bill in the National Assembly is largely the reason for the delay in the World Bank disbursing billions worth of Development Policy Operation (DPO) financing in the current financial year.
DPO is a type of budget support financing that the World Bank provides directly to a country’s treasury to support policy and institutional reforms. The funding is typically released in tranches once agreed-upon conditions or policy actions are met.
Approval and adoption of the President's recommendations signal a mission by the government still to unlock the World Bank funding, with only three weeks to go before the close of 2024/25.
The Conflict of Interest Bill No.12 of 2023 will now proceed to the Senate for consideration.
Should the Senate consider the Bill, then Kenya is likely to trigger more loan offers from the lender. Treasury CS Mbadi, while appearing before the National Assembly on April 16, also confirmed the government had secured a Ksh78 billion facility from the lender, set to be disbursed in June 2025.
Kenya’s financial engagement with the World Bank remains one of the most significant among African nations, with the country currently holding an outstanding debt of approximately Ksh1.074 trillion (USD8.3 billion).
This support is spread across concessional financing from the International Development Association (IDA) and non-concessional lending through the International Bank for Reconstruction and Development (IBRD). The funding has been instrumental in supporting Kenya’s infrastructure, health, education, and economic reform programmes.
In a strategic plan covering the fiscal years 2024 to 2026, the lender committed to disburse up to Ksh1.55 trillion (USD12 billion) to Kenya. This package includes Ksh582.17 billion (USD4.5 billion) from IDA and IBRD, Ksh130 billion (USD1 billion) in private sector investment through the International Finance Corporation (IFC), and Ksh65 billion (USD500 million) in guarantees via the Multilateral Investment Guarantee Agency (MIGA).
However, access to this funding is contingent upon Kenya meeting strict reform benchmarks, including the passage of key legislation such as the Conflict of Interest Bill. The World Bank views these legal and governance reforms as critical to ensuring transparency and accountability in the management of public resources.
