Home Economy World Bank reaffirms support for Kenya’s growth plan

World Bank reaffirms support for Kenya’s growth plan

64
0

World Bank has assured Kenya of its continued support as the country strives to become an upper middle-income country, anchored under the Vision 2030 blue print.

The Group’s board of executive directors sitting in Washington yesterday voiced its support for World Bank’s latest six-year strategy to support the country in its ongoing efforts towards green, resilient, and inclusive development.

The Kenya Country Partnership Framework (CPF) is a joint strategy between the World Bank, the International Finance Cooperation, the Multilateral Investment Guarantee Agency (MIGA) and the government.

It is aimed at promoting shared prosperity and reduce poverty among the population.

Informed by extensive stakeholder consultations, the CPF seeks to drive faster and more equitable labor productivity and income growth, greater equity in development outcomes across the country, and help sustain Kenya’s natural capital for greater climate resilience.

“The people of Kenya are in a position to reap even greater dividends from the country’s robust economic growth in terms of more durable poverty reduction,” said Keith Hansen, World Bank Country Director for Kenya. 

Tackling the drivers of inequality  will help to ensure that Kenya can achieve and maintain more equitable development in the long run, Hansen said.

Over the past decade, Kenya’s economy has outperformed its low- and middle-income country (LMIC) peers with the growing number of better-educated and healthier Kenyans in the labor force.

This has contributed to more than any other factor, the rising gross domestic product (GDP).

More recently, however, the pace of poverty reduction, and then the Covid-19 pandemic, revealed how vulnerable many households are when faced with shocks.

Though Kenya’s economy is rebounding from the pandemic and projected to grow by an average 5.4 per cent during 2022-24, the ongoing drought and global inflation are causing poverty to rise, World Bank notes.

The CPF finds that Kenya is still well positioned to secure more inclusive growth.

World Bank said it is ready to provide support that targets lagging areas and communities with better services and infrastructure, that build household and community resilience.

In doing so, it aims to help Kenya avoid the inequality and productivity traps experienced by other Middle-Income Countries (MICs).

“Kenya’s private sector is poised to drive faster job creation and to seize new opportunities from global and regional integration,” IFC regional director for Kenya Jumoke Jagun-Dokunmu said.

This, however, will require a more level playing field for competition and innovation for large and small firms and between public and private enterprises, she notes.

The CPF also aims to help raise the productivity of small firms, small producers, and women entrepreneurs, improve the investment climate across the country, and stimulate more private participation in public service delivery.

To support Kenya’s response to climate change, the CPF has programmed investments to reduce water insecurity, and to mobilise more climate finance for both public and private investments.  

“MIGA aims to unlock more private sector investment in climate responsive projects in Kenya through innovative financial solutions,” said Merli Baroudi, MIGA director for economics and sustainability.

The CPF draws on Kenya’s Vision 2030, the new government’s development agenda.

It is a systematic country diagnostic, a country private sector diagnostic, a completion and learning review of the previous country partnership strategy, and over 34 stakeholder consultations, including with Kenya’s diaspora.

The World Bank Group is Kenya’s largest development financier where together with the IMF, they have stepped up lending to Kenya over the past three years, which has helped reduce loan deals from the likes of China.

IFC’s portfolio of private sector investments in Kenya is its fourth largest and fastest growing in Sub-Saharan Africa, and MIGA’s financial operations in Kenya are its third largest program in Africa.