Kenya receives $1 billion World Bank loan as Lavrov makes surprise visit
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The World Bank yesterday approved a $1 billion loan to Kenya to support its budget as the country tries to mitigate the weakening currency and high public debts. The terms of the debt commits Kenya to institute reforms “aimed at creating fiscal space”, generally interpreted as a regime of austerity and interference by international financial institutions.
A statement from the Senior Economist for the World Bank in Kenya, Aghassi Mkrtchyan, said that the reforms would “achieve fiscal consolidation” to reduce debt burden, improving agricultural competitiveness, and improving governance. This would be the fourth such loan that Kenya has taken out since 2019, the previous loan as recently as March 2023.
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The World Bank loan is seen as the extension of one of President William Ruto’s policy platforms as he ran on a ticket to restore “fiscal discipline” in the face of soaring public debt. The World Bank loan would mean a programme of austerity with a number of social and public good initiatives facing the chopping block.
President William Ruto, who was elected last year, has pledged to restore fiscal discipline after public debt surged under his predecessor. However, his proposal to raise taxes and cut spending has been met with severe backlash from opposition and civil servants alike.
Lavrov’s flying visit to Kenya
Meanwhile, Russian Foreign Minister Sergei Lavrov has made a visit to Kenya ahead of the BRICS summit due to be held in Cape Town, South Africa. This follows his Ukrainian counterparts visit to the continent to try to sway support for the US and Nato-led military and diplomatic operations against Russia and its allies.
The trip was not announced in advance. According to the Russian Foreign Ministry, Mr Lavrov met Kenyan lawmakers to discuss co-operation in trade, investment and economic spheres, humanitarian and cultural questions, education, co-operation with the United Nations, and many other issues.”
Russian Foreign Minister Sergey Lavrov met Kenyan leaders on Monday on a surprise visit to Nairobi, as Moscow and Kyiv both seek to bolster support from African nations over the war in Ukraine.
“During our visit we will discuss our cooperation in the trade, investment and economic spheres, humanitarian and cultural questions, education, cooperation in the UN and many other issues,” according to the Russian Foreign Ministry.
