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The Government gets Sh22 billion from World Bank to bail out the poor

NEWS
By By JAMES ANYANZWA | Sep 10th 2013 | 3 min read
By By JAMES ANYANZWA | September 10th 2013
NEWS

By JAMES ANYANZWA

The Government has received a loan of Sh21.8 billion ($250 million) from the World Bank to help cushion the poor and the vulnerable.

The latest funding brings the government’s social protection kitty to Sh385.4 billion ($4.43 billion)

The credit seeks to help Kenya fight extreme poverty by setting up a national social safety net programme to reach up to 3.3 million of the country’s poorest people by 2017.

 The beneficiaries of the national safety net programme will receive Sh2,000 every two months.

These will include orphans and vulnerable children, older persons and persons with disability.

In addition, unemployed persons who can prove beyond any reasonable doubt that they are indeed needy will also benefit from the kitty. Treasury Cabinet Secretary Henry Rotich said the payments would be made through specific service providers and will cover all the 47 counties. 

“Orphans, the elderly and persons living in the arid and semi-arid areas form the largest category of those severely affected by poverty,” he said. “This category of persons is prone to hunger as a result of droughts and floods. They are excluded from mainstream economic activities, are denied education and health facilities, and basic needs.”

Rotich noted that 42 per cent of the population live below the poverty line due to lack of sustainable incomes to enable the poor meet their basic needs. 

He spoke during the signing of the loan agreement with World Bank Country Director for Kenya Diarietou Gaye at the Treasury yesterday.

Cash transfer

He said the programme’s coverage has been low and limited due to inadequate and sustainable financing.

“The on-going cash transfer programme is only able to cover 1.65 million people or four per cent of the population as opposed to the government’s target of nine per cent of the vulnerable population,” he said.

He said the loan would enable the State achieve the target of at least nine per cent of the absolute poor population through various safety net interventions. Rotich explained that the 40-year loan, with a grace period of 10 years, will attract an interest rate of 0.75 per cent. The programme, approved by the World Bank Board in July, seeks to cushion the poorest and vulnerable households from the worst effects of crises such as drought, malnutrition and unemployment.

In the 2013/2014 Budget statement,  Rotich allocated Sh13.4 billion to cushion the poor and vulnerable against  poverty.

 “Cushioning the poor against devastating income losses through a small but regular transfer of money will help them afford basic needs such as nutrition and healthcare and also keep their children in school,” said Diarietou Gaye, World Bank Country Director for Kenya.

“It will also help them to feel and become part of the economy.”

Gaye said the programme will merge existing ones like cash transfer for orphans and vulnerable children, the hunger safety net programme and the older persons cash transfer.

 Others are the urban food subsidy cash transfer and the persons with disability cash transfer.

“Consolidating social safety nets will expand reach and improve results,” she said.

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