The World Bank Board of Directors approved this Wednesday (29) a $750 million International Development Association (IDA) credit to support the Government of Kenya’s reforms to enhance inclusive growth, accelerate poverty reduction and achieve its Vision 2030 objective of becoming a middle-income industrialized country. The operation lends support to the government’s “Big Four” agenda which prioritizes agriculture, affordable housing, universal health coverage, and manufacturing.
In agriculture, the Kenya Inclusive Growth and Fiscal Management Development Policy Financing facility will support critical reforms that will enhance competition and market transparency, reduce corruption opportunities, and help Kenyan farmers to achieve higher productivity and to increase their incomes.
In housing, the operation will remove major regulatory constraints that developers face, help them lower construction costs, and thereby increase the supply of less-expensive housing units. The reforms supported by the operation will unlock the availability of long term home loans and catalyze the development of the housing finance market in Kenya, which is expected to triple the proportion of households in Kenya who have access to a mortgage.
“Measures supported by this operation are expected to benefit ordinary Kenyans through better targeting of agricultural subsidies to reach low-income farmers, prosecuting those who engage in fraudulent procurement practices, increasing availability of affordable housing, and improving revenue mobilization. This operation creates a foundation for essential reforms for fighting corruption, liberalizing markets, and enhancing inclusive growth,” said Felipe Jaramillo, World Bank Country Director for Kenya.
Kenya has been one of the fastest growing economies in sub-Saharan Africa over the past decade. For this growth to be sustained into the future and help reduce poverty, critical reforms are required.
“The policy and institutional reforms supported by this operation will help improve the standard of living of ordinary Kenyans. Additionally, the policy reforms will contribute to improving good governance by the reinforcement of accountability and enforcement mechanisms through the use of digital technologies,” says Allen Dennis, World Bank Task Team Leader.
Kenya has been one of the fastest growing economies in sub-Saharan Africa in the last decade
The operation is aligned with the World Bank Group’s twin goals of ending extreme poverty and promoting shared prosperity. This operation also complements other interventions supported by the World Bank and other development partners in support of the government’s inclusive growth agenda.