Treasury gets World Bank boost for cash transfers

Monday, September 09, 2013 — updated on December 25, 2020 - 2 min read

World Bank country director Diarietou Gaye (left) and Treasury secretary Henry Rotich during the signing of an agreement for a national social safety net programme for the poor at Treasury Building in Nairobi on September 9, 2013. Photo/Salaton Njau

The Treasury on Monday signed a Sh22 billion ($250 million) concessional loan with the World Bank to be used for cash transfers to poor households.

The amount will supplement the Sh13.5 billion set aside by Treasury this year for the extremely poor and vulnerable people. Each household under the programme will receive Sh2,000 monthly.

“Although the government has provided increased budgetary resources in support of the safety net programme, the coverage has been low and its effectiveness limited due to inadequate and unsustainable financing,” said Treasury secretary Henry Rotich.

The programme covers 1.65 million people in 300,000 households, only four per cent of the population as opposed to the government’s target of nine per cent of the most vulnerable population.

Cornelia Tesliuc, senior social protection specialist at the World Bank, said the criteria for identifying beneficiaries included setting a cut-off score for the extremely poor and confirming their income levels by counter-checking with the community in which they live.

In Rwanda, a government cash transfer programme supported by the World Bank has contributed to cutting poverty from 57 per cent of the population in 2006 to 45 per cent in 2011. It supports 500,000 people.

Mr Rotich said the proportion of Kenyans below the poverty line stands at an estimated 42 per cent, down from 46 per cent on the basis of the 2005/6 household budget survey. A new budget survey underway is expected to show the current level of poverty.

The loan is tied to a condition that the Treasury releases its portion of Sh13.5 billion to the ministry of Labour.

Signing for the debt was done by Mr Rotich and World Bank country director Diarietou Gaye.

The programme targets about 3.3 million by 2017, but it covers 300,000 people this year, up from 151,000 in the previous financial year.

Ms Gaye said the initiative merges five existing programmes covering cash transfer to orphans and vulnerable children, the hunger-stricken, the older persons, subsidy for urban extremely poor and persons with severe disability.

Similar programmes have been implemented in Ethiopia and Rwanda, Brazil and Mexico, but were only first introduced in Kenya in 2004 by Unicef.