Kenya – The African Development Bank approves an 89 million euro loan to support economic recovery

The Board of Directors of the African Development Bank Group has approved an 89 million euro loan to boost the Kenyan government’s economic recovery efforts.

The loan will finance the second phase of the Kenya Competitiveness and Economic Recovery Support Program (CERSP) which was approved by the Bank in June 2021 and will help the country create fiscal space to respond to other priorities in one of the largest economies in the region. . CERSP supports reforms in three areas: (i) achieving fiscal sustainability by improving anti-money laundering and e-procurement frameworks and oversight of SOE operations; (ii) strengthen industrial development and competitiveness to deepen the contribution of the manufacturing sector in line with the “Big Four” agenda while promoting climate resilience and green growth; and (iii) strengthen economic and social inclusion by strengthening the social protection system and universal health coverage.

The first phase of CERSP supported the implementation of anti-corruption regulations that strengthened public procurement policies and procedures. In addition, the Public-Private Partnership Directorate was created, which enabled the government to streamline the approval of high-quality public-private partnership (PPP) infrastructure projects. Other efforts have been made to support government initiatives to promote social inclusion and economic empowerment of women, such as the launch in 2020 of the 10 billion Kenyan shillings credit guarantee scheme for Micro and Small Enterprises, Women’s Enterprise Fund and Affirmative Government Action. A fund that provides women with interest-free loans to expand their small businesses nationwide.

Building on the reforms supported by the Bank under the first phase, the second phase of CERSP will support Kenyans in their efforts for greater transparency in public sector transactions by announcing the adoption of an electronic system of public procurement by mandating companies that participate in public procurement. disclose information on their beneficial owners to the procuring entity/contracting authority. Further efforts will be made to help Kenya strengthen anti-money laundering and anti-terrorist financing measures on multiple fronts.

This phase will also focus on strengthening industrial development and competitiveness and improving policy frameworks that will deepen the contribution of the manufacturing sector and strengthen public investment management while promoting climate resilience and green growth.

Finally, the second phase will examine measures to improve economic and social inclusion by strengthening the social protection system and advancing universal health care.

“The African Development Bank is pleased to continue to support the Government of Kenya’s reform agenda which aims to strengthen the fight against corruption and support inclusive growth while improving the environment for infrastructure development which is the backbone of the economy. The reforms the Bank has supported through Budget Support Operations have enhanced the bankability of major infrastructure projects,” said Nnenna Nwabufo, Managing Director of the African Development Bank for East Africa.

The Competitiveness and Economic Recovery Support Program is running in parallel with similar operations by the World Bank and the International Monetary Fund.

Despite the challenges the country has faced due to the Covid-19 pandemic, Kenya’s economic recovery has happened faster than expected, thanks to accelerated vaccinations and sound economic policies. Gross domestic product growth rebounded strongly to 7.5% in 2021, after contracting 0.3% in 2020, and is expected to average 5.7% in 2022-23.

Contact:

Gershwin Wanneburg, Communications and External Relations Department, [email protected]

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