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Kenya gets $750 million World Bank loan to Assist recovery from COVID-19 effects

Please try another search Economy3 hours ago (Jun 11, 2021 05:41AM ET) © Reuters. FILE PHOTO: FILE PHOTO: A health worker talks to her colleagues as they prepare to receive the AstraZeneca/Oxford vaccine under the COVAX scheme against coronavirus disease (COVID-19) at the Kenyatta National Hospital in Nairobi, Kenya March 5, 2021. REUT By Duncan…


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Economy3 hours ago (Jun 11, 2021 05: 41AM ET)

Kenya gets $750 million World Bank loan to help recovery from COVID-19 effects© Reuters. FILE PHOTO: FILE PHOTO: A health worker talks to her colleagues as they prepare to get the AstraZeneca/Oxford vaccine beneath the COVAX scheme against coronavirus disorder (COVID-19) at the Kenyatta National Hospital in Nairobi, Kenya March 5, 2021. REUT

By Duncan Miriri

NAIROBI (Reuters) – Kenya has obtained a $750 million loan from the World Bank to support its budget and assist the East African economy recover from the effects of this COVID-19 pandemic, the multilateral lender said on Friday.

The Kenyan government was pushing hard to secure overseas funding to fill a wide budget deficit before its fiscal year closes at the end of this month.

The $750 million disbursement a part of World Bank’s Development Policy Operations (DPO), which lends cash for budget support rather than funding specific projects.

The bank said a few of the funds goes towards setting up an electronic procurement system for government products and services to boost transparency.

The World Bank said the concessional loan is going to have a 3.1% annual interest rate. Ordinarily, World Bank loans have zero or very low rates of interest and have repayment periods of 25 to 40 years, using a five- or 10-year grace period.

On Thursday, Finance Minister Ukur Yatani introduced to parliament that the 2021/22 budget, with a deficit of 7.5% of gross domestic solution, reduced from 8.7% for the current financial year ending this month.

The finance ministry predictions a economic growth of 6.6% this year, recovering from 0.6% in 2020 when businesses like tourism and associated services dropped due to restrictions imposed to curtail the spread of COVID-19.

The World Bank forecasts Kenya’s economy will grow 4.5percent this year, and 4.7% in 2022.

President Uhuru Kenyatta, who took the helm at 2013, has overseen a leap in people borrowing. Complete debt stands 70% of GDP, up from approximately 45percent when he took over – a spike that some politicians and economists say is saddling future generations with too much debt.

The government has defended the increased borrowing, saying the nation must invest in its own infrastructure, including roads and railways.

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