World Bank Sets Out 11 Reforms Kenya Must Enact to Unlock KSh96 Billion Loan
The World Bank has issued a fresh list of stringent reforms that Kenya must implement before the release of a $750 million (KSh96.9 billion) loan, delaying a crucial disbursement initially expected in mid-2025.
According to Business Daily, the Bretton Woods institution said the funds would only be released once Kenya passes a series of key legislative and regulatory measures aimed at strengthening transparency, governance, and financial sustainability.
“These reforms are designed to promote accountability, enhance fiscal management, and support inclusive growth in Kenya,” a World Bank representative familiar with the matter was quoted as saying.
Eleven Reforms Tied to Loan Disbursement
Among the conditions, the World Bank has directed Kenya to amend the Competition Act to tighten controls over dominant firms in major sectors — a move expected to promote fairer market practices.
The lender also wants Kenya to permit refugees to register for mobile money and telecommunications services, including M-Pesa, as part of a broader drive toward financial inclusion and refugee integration.
Other key conditions include:
- Establishing regulations for sustainability-linked bonds, allowing Kenya to tie public borrowing to environmental and social performance targets.
- Developing an urban transport policy that reduces congestion in major cities and encourages the use of commuter rail systems.
- Centralising all government accounts at the Central Bank of Kenya (CBK) to improve financial oversight and reduce leakage.
- Expanding the use of e-procurement systems to curb corruption in the acquisition of public goods and services.
- Implementing regulations under the Conflict of Interest Act and Social Protection Act, both aimed at enhancing integrity in public service and expanding welfare coverage.
- Further rolling out the Treasury Single Account (TSA) and e-Government Procurement systems.
- Creating a framework for the swift passage of county governments’ additional allocations bills.
- Updating Kenya Information and Communications Regulations to reflect digital governance priorities.
- Amending the Forest Conservation and Management Act and adopting a sovereign sustainability-linked financing framework aligned with global green standards.
New Laws to Strengthen Transparency
The upcoming Social Protection Act will require both national and county governments to establish an Enhanced Single Registry (ESR), which will serve as a unified database for identifying and delivering cash transfers to vulnerable populations.
Meanwhile, the Conflict of Interest Act seeks to curb corruption by preventing public officials with private business interests from influencing government tenders or procurement processes.
“These measures are not punitive but essential for Kenya to strengthen its governance and ensure public resources are used responsibly,” the World Bank official added.
Talks with Parliament and Treasury
To accelerate the process, World Bank officials recently met with National Assembly Speaker Moses Wetang’ula and Treasury Cabinet Secretary John Mbadi, urging them to fast-track the enactment of the pending reforms.
The discussions come under the framework of a three-year Development Policy Operation (DPO) agreement signed in June 2024, under which the World Bank had already released an initial $1.2 billion (KSh155 billion) tranche.
Under the terms of the DPO, Kenya cannot renegotiate the deal and must comply fully with the reform programme or risk forfeiting the remaining funds.
IMF Also Watching Closely
Simultaneously, Kenya remains in talks with the International Monetary Fund (IMF) for a new funded programme. However, sources indicate the IMF has also delayed further disbursements due to concerns over alleged exchange rate manipulation by the National Treasury.
Last month, an IMF delegation concluded technical discussions in Nairobi without reaching a staff-level agreement, underscoring growing unease among international lenders over Kenya’s economic management.
Analysts warn that the combined scrutiny from both the World Bank and IMF highlights the urgency for Kenya to accelerate reforms, especially amid rising public debt and persistent currency pressures.
“The message from global lenders is clear: Kenya must deliver on structural reforms before accessing new financing,” said a Nairobi-based economist. “Failure to do so could deepen fiscal stress and delay recovery.”
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World Bank Sets Out 11 Reforms Kenya Must Enact to Unlock KSh96 Billion Loan