The Kenyan government, through the National Treasury, has applied for an urgent loan from the World Bank to help it finance the budget.
In a letter penned by Treasury CS Henry Rotich, Kenya has asked the World Bank for a Sh75 billion loan which he had described as “Inclusive Growth and Fiscal Management Development Policy Financing”.
The loan facility requested by Rotich is meant for emergency purposes and is quickly dispensed directly to the budget as opposed to the normal World Bank loans that are attached to specific projects.
The CS told the World Bank that the money would come in handy in supplementing the budget for various Big Four Agenda projects – particularly affordable housing and food security
Kenya has not applied for such a loan since the days of the Kanu government as President Mwai Kibaki’s government had a policy of avoiding such credit.
The loan request is yet another sign of the ballooning public debt that has seen the government go to the extent of borrowing to repay existing loans.
Two weeks ago, the Treasury borrowed Sh210 billion in the new Eurobond that will be repaid in two tranches of 7-year and 12-year subscriptions.
Part of the money (Sh75 billion) will be used to repay the famous but controversial Eurobond of 2014 which matures in June this year.
The Treasury said proceeds from the May 2019 Eurobond would also fund unspecified development infrastructure projects.
