Kenya has been approved for a loan of Sh107 billion to help in the budget as well as deal with the economic shocks caused by the coronavirus pandemic.
The loan is the largest amount funded by the World Bank, which will be repaid until 2060. The Treasury was allowed to start repaying the principal in 2025. This will be after a grace period of five years to ease the quarterly repayment costs.
Out of the Sh107bn, $750 million will come from the International Development Association and will be repaid on a period of 30 years at an interest rate of 1.35 percent. The other $250 million will come from the International Bank for Reconstruction and Development and will be repaid with an interest rate of 2 percent.
According to Ukur Yatani, World Bank move to approve the loan was a vote of confidence in the state’s handling of the economy during the coronavirus crisis.
“The (World Bank) does not provide Budget support to countries with a weak macro framework…This (loan) will help us reduce our move for commercial loans because it is highly concessional,” said Mr. Yatani.