Kenya ‘Big Four’ agenda gets $750m
The World Bank Board of Directors
have approved a $750m International Development Association (IDA) credit to
support Kenya’s reforms to enhance inclusive growth, accelerate poverty
reduction and achieve its Vision 2030 objective of becoming a middle-income
industrialized country.
The facility is to support Kenya’s
‘Big Four’ agenda which prioritizes agriculture, affordable housing, universal
health coverage, and manufacturing.
In agriculture, the Kenya
Inclusive Growth and Fiscal Management Development Policy Financing facility
will support critical reforms that will enhance competition and market
transparency, reduce corruption opportunities, and help Kenyan farmers to
achieve higher productivity and to increase their incomes.
Reforms supported by the facility
include better targeting of subsidies for agricultural inputs to reach the
intended beneficiaries (using e-vouchers and biometric digital identification);
reducing inefficiencies and leakages in the procurement and marketing of
fertilizer; and establishing a warehouse receipt system and a commodities
exchange to help farmers get easier access to credit and to reduce post-harvest
losses.
By supporting the advancement of
digitization through the creation of the national digital ID and pushing for
access of internet services to all Kenyans, the facility will enhance service
delivery by the government to its citizens and reduce the need for face-to-face
interactions and corruption opportunities.
In housing, it will remove major
regulatory constraints that developers face, help them lower construction
costs, and thereby increase the supply of less expensive housing units. The
reforms supported by the operation will unlock the availability of longer term
home loans and catalyze the development of the housing finance market in Kenya
which is expected to triple the proportion of households in Kenya who have
access to a mortgage.
The operation will also provide
support to the government’s medium term fiscal consolidation plan by supporting
measures to improve revenue mobilization, public expenditure and the prudent
management of Kenya’s debt. It also supports reforms to enhance the private sector’s
participation in the inclusive growth process.
“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 practices, increasing availability of
affordable housing, and improving revenue mobilization. This operation creates
a foundation for essential reforms for fighting corruption, liberalizing
markets, and enhancing inclusive growth,” Felipe Jaramillo, World Bank Country
Director for Kenya, explained.
Kenya has been one of the fastest
growing economies in Africa over the past decade. For this growth to be
sustained into the future and help reduce poverty, critical reforms are
required.
“The policy and institutional
reforms supported by this operation will help improve the standard of living of
ordinary Kenyans. Additionally, the policy reforms will contribute to improving
good governance by the reinforcement of accountability and enforcement
mechanisms through the use of digital technologies,” Allen Dennis, World Bank
Task Team Leader, said.
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