World Bank detains Sh14bn loan for Covid vaccines

The World Bank has delayed release of a Sh14.4 billion loan to help Kenya buy Covid-19 vaccines, threatening the government’s plan to inoculate 10 million people by December.

The Treasury has disclosed to Parliament that the multilateral lender was yet to disburse the loan that was approved in June.

The loan hitch could derail Kenya’s target to ship in millions of Covid-19 vaccine shots from Johnson & Johnson and meet its inoculation targets.

About 3.3 million Kenyans, out of 47 million, have had a first jab and only 1.2 million are fully vaccinated, according to the Ministry of Health.

The World Bank says the billions of shillings will be released to the Treasury once Kenya meets certain undisclosed conditions are met.

“As per normal World Bank procedure, new projects or new loans following approval have to comply with certain actions before disbursement can start,” the World Bank said in an email response to the Business Daily.

“These are currently being completed. Kindly follow up with the Treasury and Ministry of Health for details.”

The Treasury declined to comment on the conditions and progress on release of the loan.

The World Bank and the International Monetary Fund (IMF) are playing a role in shaping policy that would require the government to implement tough conditions across many sectors.

The conditions come on the back of their multi-billion shilling loan facilities to Kenya where money flows straight into the budget to top up the public purse.

Under the administration of former President Mwai Kibaki, Kenya kept away from this type of credit, with most of the support from institutions like the IMF and the World Bank coming in the form of project support.

Kenya has recently faced a deteriorating cash-flow situation, marked by stagnant revenues, worsening debt service obligations, and the effects of the Covid-19 pandemic.

On vaccines, the World Bank says it has opened a window for Kenya to acquire part of the vaccines on credit pending release of the loan.

“The World Bank has built flexibility into the structuring of the vaccine loans that allows dynamic procurement. It gives comfort to suppliers to respond fast in availing the vaccines,” said the World Bank.

“For example, using retroactive financing as stipulated in the current financing agreement, Kenya has already purchased 393,600 vaccines.”

The World Bank financing will help Kenya buy vaccines through an African Union facility set up for that purpose, as well as through COVAX, the global scheme for sharing vaccines equitably.

The cash will also be used to boost Kenya’s cold chain facilities for storage of vaccines, training of health personnel and other associated activities.

Kenya had struck a deal to get 13 million shots from J&J for the price of 10 million doses, and hoped to accelerate the country’s vaccination drive given the vaccine is administered in a single shot.

The country has been hit by deadly waves of Covid-19 infections this year, forcing it to re-impose stringent containment measures.

It recently extended containment measures, including an overnight curfew and ban on political gatherings, for another 30 days.

Yesterday, President Uhuru Kenyatta hinted that the measures could be eased in the coming days at a time when Kenya has recorded a decline in Covid-19 infections while the number of admissions in health facilities is also falling.

The positivity rate — the proportion of tests coming back positive — climbed sharply by a double-digit from July, raising concerns among health officials.

The rate has dropped from 14.5 percent on August 15 to 0.9 percent yesterday as the government steps up testing and vaccination.

The World Health Organization (WHO) recommends that the positivity rate should remain below five percent for at least two weeks before governments consider relaxing containment measures.

Kenya requires Sh34 billion to ship in 36 million doses of Covid-19 vaccines by June next year when it expects to have 16 million people inoculated.

Donors will provide Sh20 billion, leaving Kenya to seek Sh14 billion from taxes and donors like the World Bank.

COVAX, which is led by the GAVI vaccines alliance along with the WHO and other partners, aims to deliver over 1.3 billion doses to 92 lower- and middle-income countries, covering up to 20 percent of their populations.

Kenya will offer the Covid-19 vaccine shots free of charge to its citizens, but will pay $7.70 (Sh853.70) per shot of the vaccines as negotiated under the COVAX facility.