The facility also targets subsidies for agricultural inputs to reach the intended beneficiaries.
The World Bank Board of Directors today approved Sh75.9 billion Government’s loan to help curb poverty and helps Kenya achieve its Vision 2030 objectives.
The operation through International Development Association (IDA) credit will lend support to the government’s “Big Four” agenda which prioritises agriculture, affordable housing, universal health coverage, and manufacturing. B
In agriculture, the Kenya Inclusive Growth and Fiscal Management Development Policy Financing facility will support critical reforms to enhance competition and market transparency, reduce corruption opportunities, and help local farmers achieve higher productivity.
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The facility targets subsidies for agricultural inputs to reach the intended beneficiaries (using e-vouchers and biometric digital identification), reducing inefficiencies in the procuring fertiliser and establishing a warehouse receipt system and a commodities exchange to help farmers get easier access to credit and reduce post-harvest losses.
Through digitisation, creation of the national digital ID and pushing for access of internet services to all Kenyans, the facility will enhance service delivery and reduce the need for face-to-face interactions hence curbing corruption.
In housing, the operation will remove major regulatory constraints that developers face, help them lower construction costs thereby increasing the supply of less-expensive housing units.
The reforms supported by the operation will unlock the availability of long-term home loans and catalyse the development of the housing finance market in Kenya, which is expected to triple the proportion of households with access to a mortgage.
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The operation will also support measures to improve revenue mobilisation, public expenditure and the prudent management of Kenya’s debt.
It also supports reforms to enhance private sector’s participation in the inclusive growth process.
“Measures supported by this operation are expected to benefit ordinary Kenyans through better agricultural subsidies to reach low income farmers and prosecute those who engage in fraudulent procurement practices,” said, World Bank Country Director for Kenya Felipe Jaramillo.
This operation creates a foundation for essential reforms for the anti-graft war, liberalising markets and enhancing inclusive growth,” Jaramillo added.
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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 improve the living standard of ordinary Kenyans. Additionally, the policy reforms will improve good governance by the reinforcement of accountability and enforcement mechanisms through the use of digital technologies," said World Bank Task Team Leader Allen Dennis.
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.