|
Getting your Trinity Audio player ready...
|
On Monday, the World Bank announced its anticipation of providing substantial support to Kenya, amounting to $12 billion over the next three years. This potential injection of funds could significantly alleviate the financial challenges faced by the East African nation. However, the World Bank clarified that the total amount is contingent upon the approval by its executive directors and various factors influencing its lending capacity. Kenya has grappled with fiscal pressures due to the lingering effects of the COVID-19 pandemic and recurrent droughts triggered by climate change, placing strain on the country’s public finances.
“The World Bank is fully committed to supporting Kenya in its journey to become an upper-middle-income country by 2030,” the statement said. “Subject to the World Bank Executive Directors approval of new operations, and to factors which may affect the bank’s lending capacity, this implies a total financial package of $12 billion over the three years.”, said the world bank statement.
Due to uncertainties regarding its ability to secure financing from financial markets before the maturity of a $2 billion Eurobond next June, Kenya has faced significant liquidity challenges. This week, the International Monetary Fund (IMF) reached a staff-level agreement with Kenya, providing the country with immediate access to an additional $682 million tranche of funds and expanding its existing lending program by $938 million. World Bank Country Director Keith Hansen noted that the World Bank aimed to clarify the anticipated level of resources available to Kenya in response to recent government statements and the IMF staff consensus.
Many African countries face similar financing difficulties, exacerbated by the Covid pandemic and rising global interest rates. Neighboring Ethiopia also finds itself in a long and drawn-out negotiations multilateral financial institution as well as bilateral creditors.
