Accessibility links

World Bank to Resume Aid to Kenya - 2003-02-10

A World Bank mission to Kenya says it will resume donor assistance to help the newly elected government of President Mwai Kibaki rebuild the country.

World Bank Vice-President for Africa Calistus Madavo made the announcement in Nairobi at the beginning of three days of talks with the National Rainbow Coalition government.

"The fact that we would provide strong support to you and your colleagues, to President Kibaki and the administration as we move forward, that there is no doubt," Mr. Madavo said.

Kenya has not been able to get loans from major international lending institutions, notably the World Bank and the International Monetary Fund, because of corruption among senior officials of the former government of President Daniel Arap Moi. As a result, Kenya lost most donor support almost a decade ago, becoming one of the poorest countries in the world.

Mr. Madavo said the World Bank had a long-standing relationship with the government of Kenya, and is eager to normalize ties as soon as possible.

"We will in the next few days listen to your priorities learn about the directions which you want to take and also listen to you in terms the areas of support that the World Bank group might provide to Kenya," he said.

"That is why I am accompanied in this mission by my colleagues from the IFC [International Finance Corporation], and my colleagues from MIGA [Multi-lateral Investment Guarantee Agency] because we wanted to signal to you and the people of Kenya that the World Bank group is very keen to re-engage vigorously, to provide the support as you go forward," he explained.

The newly-elected government of President Mwai Kibaki has pledged to fight corruption at all levels by establishing an anti-corruption authority, as demanded by donors and lenders.

It has also promised to achieve six percent economic growth and to create a half-million jobs every year. But the government has also undertaken to provide certain free services, such as primary education and medical care in government hospitals.

Finance Minister David Mwiraria said the government can not achieve these aims without donor support. "Given the economic situation from which we are starting, our hopes and aspirations can only be fulfilled if we get assistance from our development partners. When the budget we are operating under was given to the Kenyan public the then-minister expected a budget deficit of about 32 billion shillings. When we examined the budget, which we expect up to the end of this financial year, it is coming to 57 billion Kenya shillings," Mr. Mwiraria said.

That would be about $800 million.

Mr. Mwiraria attributes this budget deficit to a shortfall in revenue collection, financing of free education and servicing of the country's foreign debt.

Since the National Rainbow Coalition government took office in early January, several donor countries and institutions have pledged to resume lending to Kenya. The visit by the World Bank delegation follows a similar one last month by the International Monetary Fund, during which the Fund promised to resume lending by July.