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Kenya’s Treasury has reached out to the World Bank for a KSh75 billion loan to be used to support the budget as well as other development programs under the government’s agenda.
The World Bank already funds several development programs in Kenya whereby the money is sent directly to the projects. However, this latest appeal will have the global lender channel the money straight to the government.
The last time Kenya sought this kind of credit from the World Bank is more than a decade ago, an indication of the country’s deteriorating cash flows.
Kenya’s level of public debt has been steadily rising since 2013 when President Kenyatta took office, from 42 per cent of the GDP to over 55 per cent of the GDP. The increased level of borrowing has been attributed to aggressive infrastructural development by the government.
Some economists have raised alarm over the high level of public debt saying that it is unsustainable. The cost of servicing the debt has also gone up. As a result, Kenya’s financial burden has been elevated. The National Treasury Cabinet Secretary Henry Rotich noted that the government is working to bring down the cost of servicing debt to between 12 and 16 per cent in the coming years.