(4 minutes read)
- World Bank thinks assistance to Kenya to streamline its procurement plans will ensure transparency and eliminate corruption
The World Bank has approved a US$750 million loan for Kenya, which can be used to finance the development projects announced during the presentation of Budget 2022 by its finance minister. For availing the concessional finance, the East African country will have to carry out reforms, particularly in its public procurement procedures. The move is aimed at eliminating widespread corruption during the procurement drives by the government.
The World Bank insists on Kenya setting up an electronic platform for public procurements to ensure transparency and eliminate corruption. The WB stipulates that by the end of 2023, the program should have five strategically selected ministries, departments, and agencies, procuring all goods and services through the electronic procurement platform.
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The US$750 million loan that has been approved is the second tranche of a credit facility that was launched for Kenya in 2020. Kenya has become eligible for the World Bank’s Development Policy Operations (DPO). By becoming eligible under DPO programme, Kenya now is eligible for availing World Bank credit. It is possible for the World Bank to lend directly to government treasuries, instead of financing against particular projects. Kenya got the first tranche of the credit facility in June 2021 at an annual interest rate of 3.0%.
The Kenyan Government announced that it was planning to expand its 2022 budget, by expanding an additional expenditure of US $956.7 million. Having a huge debt burden, like any other country in Africa, the gross debt in relation to GDP in the East African country is at a high of 69.7% . Kenya is seeking international assistance to reduce its debt burden. It is also important to say that a good chunk of the resources of the country and money loaned are spent on servicing the debt.
