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Kenya Receives $4 Billion in Pledges to Boost Economic Recovery Plan - 2003-12-04

Kenya's finance minister says donors at a recent meeting pledged more than $4 billion to help the country implement its economic recovery plan.

The finance minister, David Mwiraria, says the money pledged was far beyond his expectations.

"The donors came forward with unprecedented generosity and interest, announcing pledges of some United States dollars of $4.1 billion over a three-year period, 2004 to 2006," he said.

For this year, he says, he is expecting an additional $50 million and 40 million euros. He says almost 60 percent of the money is in the form of grants, and 40 percent in concessionary loans. Mr. Mwiraria says the money will be used to help the country's poor.

"This money, as we had stated, is to be focused on reduction of poverty, and in fact for pro-poor projects," said Kenya's finance minister.

The funding announcement comes about a week after 25 donor governments and financial institutions attended a meeting in Nairobi organized by the World Bank. Last week's donor meeting was the first since 1996.

The International Monetary Fund announced earlier it would resume lending to Kenya after a three-year hiatus, because of concerns over government corruption. The fund's loan is for almost $253 million over a three-year period.

When he opened last week's donor meeting, Kenyan President Mwai Kibaki stressed his government's commitment to fighting corruption.

He said the government's priorities under the Economic Recovery Strategy include building and upgrading roads and other infrastructure, reforming the civil service, fine-tuning the government's universal free primary education program, and improving security.

But the loan and donors' meeting generated controversy among some Kenyans. Some of the donors' conditions include privatizing certain state-owned enterprises and streamlining the civil service.

Critics say these measures would involve job loss, especially at the civil servant level. They say widespread job loss could actually perpetuate the poverty the government is trying to get rid of.

Kenya's economy has been steadily declining over the past decade to the point that, according to government reports, more than 50 percent of the population lives below the poverty line. The new government has promised to create half a million new jobs, and is trying to cope with a large budget deficit.