This archive report was first published on 20 May 2020.
On May 20, 2020, the World Bank approved a loan of USD 1 billion to Kenya, the largest Development Policy Operation (DPO) the bank has ever provided to the country.
Confirming receipt of the funds, Treasury CS Ukur Yattani expressed his gratitude, stating that the loan was a testament to the confidence levels of the bank in Kenya's new policy reforms.
However, the loan is not without its challenges. The Parliamentary Budget Office notes that supplementary increases in the budget can result in a financing gap, requiring additional domestic or external borrowing for budgetary support.
According to the Treasury, the fiscal deficit is projected to widen to 7.3% of GDP in FY 2020/21 due to the need to meet critical expenditure needs in the context of an economic slowdown and revenue underperformance.
The IMF had previously approved KSh78 billion ($739 million) to help meet Kenya's urgent balance of payments needs.
