The World Bank has at long last approved the 75 billion shilling loan to Kenya for “budgetary support” as Kenya continues to thrive on the wheels of debts.
The loan from the World Bank comes a few weeks after the National Treasury secured a 210 billion shilling Eurobond meant for infrastructural support and settlement of another Eurobond worth 75 billion shillings maturing soon.
Kenya’s debt has been skyrocketing over the year. The public debt now stands at 5.6 trillion shillings, more than 56 percent of Kenya’s gross domestic product (GDP).
This is the first time in more than a decade that Kenya went seeking a loan from the World Bank deposited directly into the National Treasury’s account.
“Measures supported by this operation are expected to benefit ordinary Kenyans through better targeting of agricultural subsidies to reach low-income farmers, prosecuting those who engage in fraudulent procurement, increasing the availability of affordable housing, and improving revenue mobilization,” said the World Bank.
The approval of the loan by the World Bank makes it hot on the heels of the 210 billion-shilling Eurobond that the country raised in May for funding infrastructure and to settle the maturing debts.
During the first quarter, the state borrowed 125 billion shillings in a syndicated loan as part of the 299 billion-shilling commercial debt it budgeted for the 2018-19 financial year.
Meanwhile, the public debt is rising and ordinary citizens long felt the pinch. The public debt hit 5.42 trillion shillings in March 2019 as domestic debt stood at 2.7 trillion shillings.
In this financial year’s budget, the overall allocation to the Executive in the budget estimates is 1.8 trillion shillings, same as 59.8 percent of the proposed total budget, with recurrent expenditure accounting for 62.8 percent allocation while development expenditure accounting for 37.2 percent allocation.
As compared to the 2019 Budget Policy Statement (BPS), budgetary allocation to the Executive has overshot the BPS ceiling by 18.6 billion shillings.
Energy, Infrastructure, and ICT sectors had the most positive variance at 22.0 billion shillings which resulted from increased development allocations to the infrastructure of 13.9 billion shillings and energy at 7.5 billion shillings sub-sectors from the BPS ceiling.
On the other end of the spectrum, Public Administration & International Relations sectors had the most negative variance at 34.4 billion shillings with the BPS ceiling.