The World Bank has provided Kenya with a KSh107 billion loan for budgetary support. Confirming receipt of the funds, Treasury CS Ukur Yattani lauded it as an indicator of Kenya’s strong macro framework.
WB Board gives full approval to Kenya’s DPO of USD 1Billion. This is the largest DPO we’ve ever received. The fact that WB does not provide budget support to countries with weak Macro framework is a testimony of the confidence levels of the bank in our new policy reforms.
— Amb. Ukur Yatani™- EGH 🇰🇪 (@BaloziYatani) May 20, 2020
Parliamentary Budget Office says that supplementary increases result in a financing gap, thus requiring additional domestic or external borrowing for budgetary support. Supplementary estimates are released during a budget year and cater for provisions of unseen and unavoidable expenditures.
Treasury projects that fiscal deficit will widen to 7.3% of GDP in FY 2020/21 due to the need to meet critical expenditure needs in the context of an economic slowdown and the ensuing revenue underperformance. The projected fiscal deficit will require net external financing of Kshs.349.7 billion (3.1% of GDP) and net domestic borrowing provision Kshs.486.2 billion (4.3% of GDP).
The IMF in May approved KSh78 billion ($739 million) to help meet Kenya’s urgent balance of payments needs.
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