The board of directors of the African Development Bank Group (AfDB) has approved a EU€89mn (approx. US$90mn) loan to bolster the economic recovery of Kenya
The loan will provide funding for the second phase of Kenya’s Competitiveness and Economic Recovery Support Program (CERSP) that was approved by the AfDB in 2021 and will help the country to free up fiscal space to address other priorities.
CERSP supports reforms under three components:
• Attaining fiscal sustainability by enhancing anti-money laundering and e-procurement frameworks and oversee the operations of state-owned enterprises
• Strengthening industrial development and competitiveness to deepen the contribution of the manufacturing sector in line with the ‘Big Four’ agenda while fostering climate resilience and green growth
• Enhancing economic and social inclusion by furthering the social protection system and universal health coverage.
Nnenna Nwabufo, the AfDB’s director-general for East Africa, commented, “The AfDB is happy to continue supporting the Government of Kenya’s reforms agenda that aim to strengthen the war against corruption and sustain inclusive growth while enhancing the environment for infrastructure development which is the backbone of the economy. Reforms that the AfDB has supported through budget support operations have enhanced the bankability of large infrastructure projects.”
CERSP is taking place in tandem with similar operations by the World Bank and the International Monetary Fund.
Despite the challenges the country has faced due to the Covid-19 pandemic, Kenya’s economic recovery has occurred faster than expected, thanks to accelerated vaccinations and sound economic policies. Growth in gross domestic product rebounded strongly to 7.5% in 2021, from a contraction of 0.3% in 2020, and is projected to average 5.7% in 2022-2023.