The World Bank has approved a Sh106.8b loan to assist Kenya in covering the deficit and handle the economic shocks from the covid -19 pandemic.
National Treasury Cabinet Secretary Ukur Yatani lauded the gesture as a vote of confidence while kenya struggles to keep the economy afloat and at the same time curb the spread of covid-19.
The loan was initiated before the pandemic and is the second ever such direct lending for the budget from the World Bank. The first direct lending was processed last year.
“Its approval is timely, since it will help fill the financing gap generated by the severe, ongoing shock to Kenya’s economy,” the World Bank said in a statement.The budget deficit has swollen to 8.2% of GDP in the financial year to the end of June, from an initial forecast of under 7%, mainly due to reduced tax collection and lost revenue from VAT and income tax cuts” Yatani said.
The CS also wrote on twitter that world-bank-group does not provide budget support to countries with a weak macro framework.