Credit surges by Sh229b in spite of virus
A World Bank report on development policy financing says the repeal of the interest rate cap in November 2019 helped lift private sector credit, which increased by Sh229 billion as of January 2021, despite the Covid-induced economic slowdown.
This is among a raft of reform efforts put in place by the World Bank to streamline Kenya’s economy amid Covid-19 pandemic under the fiscal pillar.
The Bretton Woods institution say that it’s efforts saw the country increase openness in tendering.
“From a situation where no details of tenders were published, currently over 50,000 tenders worth Sh135 billion have been published on a website (tenders.go.ke), with details of names of companies and their directors,” reads the report in part.
Value Added Tax
Further, it reveals that support to domestic revenue mobilisation including Value-Added Tax (VAT) on petroleum products helped shore up revenues by an estimated 0.3 per cent of the gross domestic product (GDP) before the onset of the pandemic.
According to the report, debt transparency has, and continues to improve amid support for the verification and publication of the external debt register.
“Kenya is among few countries to make public loan-level details of its external debts - a measure supported by the preparation of the proposed operation,” the report states.
The Bretton Woods institution says in the report that the domestic debt market functioning was supported by a new electronic system which allows for some 80 per cent of retail and institutional investors to submit their bids in the primary debt market electronically.
Accordingly, the development policy financing (DPF) also supported a new regulatory regime for investment and Special Economic Zones (SEZs).
Over 2017-2019, the number of gazetted enterprises in Kenya’s SEZs increased by 6 to 137, with an attendant capital investment increase of Sh11.6 billion and the number of workers employed increasing by 10 per cent to 61,048.
The World Bank has approved $750 million in development policy financing to support policy reforms that will strengthen accountability in public procurement and promote efficient public investment spending in Kenya.
