World Bank lends Sh38.4bn for Kenya’s public finance reforms


World Bank Country Director for Kenya, Rwanda, Somalia and Uganda Keith Hansen. FILE PHOTO | NMG

The World Bank Group has advanced Sh38.4 billion ($250 million) to Kenya to strengthen transparency in public finance management and enhance revenue mobilisation.

The funding is expected to serve an estimated 485 ministries, departments, and agencies, 240,000 registered firms, and 18 million citizens who use government e-services.

“The government of Kenya needs higher revenue mobilisation to operationalise its development agenda, while efficiency in spending will be necessary for the revenue that is mobilised to deliver its intended purpose,” World Bank Country Director for Kenya Keith Hansen said.

“This new programme will incentivise the last mile of a decade of public finance management reforms in Kenya, including their full rollout across national government ministries, departments, and agencies.”

The World Bank funding to the project was first approved in September 2017 with a commitment amount of Sh23 billion ($150 million) with the Office of the Auditor-General, the National Treasury, and the Ministry of Public Service as implementing agencies.

The programme is also partly funded by the French Development Agency (AFD) which financed the first phase of the project to the tune of Sh5 billion (30 million Euro) and a grant of Sh252.2 million.

The World Bank said the new programme would build on the gains of the initial phase, which include an electronic government procurement system, an automated cash management system, and a public investment management framework.

Others include an information management system facilitating financial management in State corporations, and a re-engineered eCitizen portal that enables citizens and businesses to conduct and pay for more than 600 types of transactions with the public sector online.

“The programme is expected to help reduce the Value Added Tax compliance gap, improve predictability and controls in budget execution, ensure that priority government programmes and projects are implemented with clear performance monitoring frameworks and that external audit recommendations are implemented and monitored in publicly available reports,” the lender said.

“It will also support Kenya’s ambition to become a regional leader in green growth by leveraging public investment and procurement spending to promote climate considerations.”

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