Central Bank of Kenya Governor Patrick Njoroge has announced that the country has received a Ksh80 billion loan from the World Bank.
According to Njoroge, the loan will come as a Development Policy Operations (DPO), to be granted in the next two weeks. The country will also receive some amount from the African Development Bank (ADF) to aid in the Covid-19 recovery program.
Speaking during the Monetary Policy Committee May conference, the governor assured that the loan will help in finding solutions for the country’s problems.
The loan will also aid in supporting the national budget and will be useful in the external resources needed.
“We expect the current account deficit to close at about 5.2% of GDP in 2021 and it will be fully financed of course.
We also expect an increased level of results from the flows," Njoroge mentioned.
Kenya has received two previous loans from the World Bank in the last two years. The loans through DPO are lent for budget support and don’t necessarily finance specific projects.
In April, the World Bank President had stated that extending the debt payment freeze through the year-end would save even more money for countries to use in combating the Covid 19 pandemic.
Kenya Bank Notes. PHOTO; TWITTER
The International Monetary Fund (IMF) is also expected to offer a Ksh41 billion disbursement, which is part of the Ksh255 billion aid package approved in April.
The IMF and Kenya had in April agreed that it was playing an important role in supporting Kenya’s long-term economic vitality.
As the financial year closes at the end of next month, the loan will help in filling the gap growing in the budget.
The government plans to seek an extension of the G20's debt-suspension initiative, aimed at helping poorer nations cope with the problems caused by Covid-19.
In the period between January to April 2021, the country’s remittance growth has been 23.3%, with April recording the highest at Ksh29 billion.
