Kenya is currently in discussions with the World Bank to secure a $750 million loan (approximately sh97 billion at current exchange rates).
Rafael Owino, Director General at the Treasury’s Public Debt Management Office, confirmed these negotiations and added that the African Development Bank (AfDB) is also set to provide Kenya with an additional $200 million (around sh26 billion).
Owino linked the World Bank’s willingness to lend to Kenya’s successful completion of the seventh and eighth reviews by the International Monetary Fund (IMF), which assessed the country’s readiness to manage and repay its debt.
“The World Bank is coming on board, building on the IMF’s backing. The AfDB is already on board,” Owino said.
A spokesperson from the World Bank’s Kenya offices also verified that the talks are ongoing, with the loan to be provided through a Development Policy Operation (DPO) to support the government.
The IMF’s recent review, completed on October 30, found that Kenya’s economy remains resilient, growing above the regional average.
Inflation has slowed, and external inflows have supported the Kenyan Shilling, all despite the challenging socio-economic environment.
“Kenya’s economy remains resilient with growth above the regional average, inflation decelerating, and external inflows supporting the Shilling and a buildup of external buffers,” said IMF Acting Chair Gita Gopinath.
This positive IMF review led to the approval of a $606 million (sh78 billion) loan to Kenya, which had been delayed following anti-government protests in June.
In addition, Kenya is also in negotiations with the United Arab Emirates (UAE) for another $1.5 billion (about sh194 billion), with a proposed interest rate of 8.25% over seven years.
The terms of this loan are still subject to change as discussions progress.
These loan discussions come as Kenya faces significant financial challenges.
The country’s Finance Bill 2024, which proposed heavy taxes amounting to over sh346 billion, sparked nationwide protests and delayed the IMF’s disbursement of its earlier-approved loan.
Amid these pressures, Kenya has set a foreign borrowing target of sh168 billion for the 2024/25 fiscal year.
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