NAIROBI, June 23 The World Bank will lend Kenya
$4 billion over the next four years, most at below commercial
rates, to help finance new infrastructure and other areas of the
economy to boost growth and cut poverty.
Thomas O'Brien, the Bank's country co-ordinator for Kenya,
Rwanda and Eritrea, said on Monday the bulk of the funds, about
$600-$800 million annually, would be in concessionary loans to
the government for transport, energy and other projects.
The rest will be direct lending to firms through its private
sector arm, the International Finance Corporation (IFC), and in
form of guarantees to foreign investors.
"We are going to be investing ... $4 billion over the next
several years to help spur economic growth (and) to bring down
poverty," O'Brien told Reuters after the launch of the bank's
Kenya strategy to mid-2018.
The east African nation relies on funding by international
development financiers like the World Bank for a portion of its
budget. Western nations are also major donors.
Finance Minister Henry Rotich said the deficit in Kenya's
budget for the year starting July 1 would be 342.4 billion
shillings ($3.92 billion), equivalent to about 7.4 percent of
gross domestic product.
O'Brien said there was an urgent need to improve the
business climate to raise private investment from the present
equivalent of 15 percent of GDP. "That means putting money into
transport, into energy, into water," he said.
Kenyan officials are racing to build new roads, airports,
seaports and energy plants to keep up with growing demand and to
cut costs of doing business, but O'Brien said more was needed.
"Like most economies, Kenya has been improving its
infrastructure but it is still not where it needs be," he said.
The World Bank's financial support will also be spent on
funding projects social sectors like education and health in
order to help the poor, he said.
Some 39 percent of the country's 40 million population are
classed as poor, which the World Bank defines in global terms as
those living on $1.25 or less a day.
($1 = 87.4500 Kenyan Shillings)
(Reporting by Duncan Miriri; Editing by Edmund Blair and John