The Board of Directors of the African Development Bank (www.AfDB.org) has approved a loan of €73 million to Kenya to support Phase III of the Competitiveness and Economic Recovery Support Programme. The financing will cover the fiscal year 2023-2024.
AfDB in a statement distributed by APO said the development is intended to build resilience and support inclusive post-Covid-19 economic recovery, by improving economic governance and boosting industrial development and competitiveness. The programme will continue to support Kenya’s medium- and long-term development through three components: fiscal consolidation to secure the viability of the public finances, strengthening industrial development and competitiveness, and improving economic and social inclusion.
The programme is designed as a programmatic General Budget Support operation, and phase I and II have enabled the Kenyan Government to fill the funding gaps for the fiscal years 2021/22 and 2022/23, enabling it to carry out post-Covid-19 economic recovery.
Phase III of the programme will support the roll out of the electronic procurement system, the Public Finance Management Amendment bill 2023 to improve debt management framework; privatization bill and ownership policy that address governance and financial challenges of state-owned enterprises; and the social protection policy and the roll-out, in 29 counties, of the enhanced single registry for Social-Protection . It will also help the government to implement other policy measures to further strengthen resilience and economic recovery across different sectors.
These measures will help consolidate the progress made during the first two phases of the programme. The programme comes in support of the Kenyan Government’s strategy to extend the average duration of the public debt portfolio in order to reduce its servicing costs over the long term. It will also support government efforts to promote competitiveness and employment and to support the livelihood of the most vulnerable.
“Kenya is pursuing the vigorous recovery of its economy after the Covid-19 pandemic and is currently faced with significant shocks. The country is facing its worst drought in 40 years and the consequences of the Russian invasion of Ukraine. This additional €73 million in financing, approved today by the Bank’s Board of Directors, will enable the country to consolidate the progress it has already made and allow the Government to have fiscal space to deal with the impact of external shocks,” said Nnenna Nwabufo, the Bank Group’s Director-General for East Africa, as she left the meeting.
