Months after Henry Rotich, Kenya’s Treasury Cabinet Secretary, wrote to the World Bank requesting an urgent credit in the form of budget support, the global financial institution has granted to Kenya’s Sh75 billion ($750 million) loan request. Further adding up to the nation’s growing debt burden.
In a letter to the bank’s President, Ms. Kristalina Georgieva dated March 13, 2019, Cabinet Secretary Rotich held that the money will be used to finance the Big Four agenda.
Kenya’s World Bank loan application is an exodus from a 10-year practice where the country kept off loans from World Bank, as it sought to persuade itself against the over-dependence on the Bretton Woods institution to funding its budget.
The Loan Is To Support Critical Reforms And Advance Digitization In The Country.
This week, the lender stated that the loan facility will fund critical reforms that will reduce corruption in agriculture, boost competition and market transparency, and also help Kenyan farmers achieve higher productivity and increase their incomes.
In a statement, the world bank said: “Reforms supported by the facility include better targeting of subsidies for agricultural inputs to reach the intended beneficiaries (using e-vouchers and biometric digital identification); reducing inefficiencies and leakages in the procurement and marketing of fertiliser; and establishing a warehouse receipt system and a commodities exchange to help farmers get easier access to credit and to reduce post-harvest losses.”
The lender further stated that the loan will support the progress of digitization through the creation of the national digital identity and pushing for access of Internet services to all Kenyans.
“The facility will enhance service delivery by the government to its citizens and reduce the need for face-to-face interactions and corruption opportunities,” it said.
Kenyans React To The Growing Public Debt Of The Country.
In recent months, Kenyans with growing concerns on the issue have raised agitations over government unquenchable appetite for foreign loans saying the lending were unnecessary and most of the times it ends up being mismanaged or embezzled to the detrimental prosperity of the future generation.
In September 2018, Kenya’s public debt crossed the Sh5.1 trillion mark and the most recent borrowing is likely to push it further than Sh5.5 trillion by close of the year.
It is said by analysts that Kenyans have been sunk into more debt by the global financial institution. They said that the country, amidst growing concern, is neck-deep in debt and may not be able to pay off the debts.
Economic experts have described the loan as Inclusive Growth and Fiscal Management Development Policy Financing. This type of credit, they said, will see the money flow straight into the budget to supplement the public purse.