Kenya
World Bank returns to Kenya

afrol News, 13 February - The World Bank and the IMF, which withdrew all financing of Kenya in 2001 due to widespread corruption in the country, are now in the process of returning. The World Bank has already committed itself to participate in the funding of Kenya's school reform, and a full return of all Bank programmed is expected by June.

World Bank Vice President for Africa, Callisto Madavo, told a Nairobi press conference yesterday the Bank had decided to release US$ 50 million to fund the education reform before the end of June without attaching any conditions. 

The new Kenyan government of President Mwai Kibaki introduced free basic education to all children at the moment of taking over power at year's end. Removing school fees immediately led to an enormous increase in children registering for education, which revealed a large deficit of school materials and tutors. The World Bank funding principally will address these deficits. 

Mr Madavo also announced that the World Bank was willing to release millions of dollars of suspended funding for economic and public sector reform if the Kenyan government meets certain conditions by the end of June 2003. This included the formation of a policy on the reform of parastatals, the introduction of a sustainable macro-economic framework, the reform of the judiciary and legal system and the privatisation of Telkom Kenya.

Further, the most important condition has been the introduction of bills curbing corruption and improving transparency (Anti-Corruption and Economic Crimes Bill and the Public Ethics Bill), he said. Fighting corruption was also the most profiled election promise of Mr Kibaki in last year's campaigns. 

In 2001, the World Bank contributed a total of US$ 195.2 million in loans and grants to Kenya, which dropped to US$ 82.1 in 2002. All the programmes put on ice in 2001 may be resumed within a few months.

- We are working closely with the International Monetary Fund (IMF) to see if we can provide budget support by releasing pending money that was held up before, Mr Madavo told journalists in Nairobi. The World Bank and the IMF put almost all Kenyan projects on ice in 2001 after government failed to introduce basic guidelines of budget control, transparency and to curb corruption. 

The World Bank representative also expressed his admiration for the new momentum in Kenya after President Kibaki took office. "We are very struck by how much is changing in Kenya, and is underway, how much is actually happening," Mr Madavo said. He emphasised the Bank wanted to "signal strongly the readiness of the World Bank to engage with the new government." 

The vigorous efforts to reform by the new administration has been received very positively both within Kenya and abroad. The government of ex-President Daniel arap Moi, which lost in the elections, had been marked by years of stagnation and corruption, creating a negative business climate in Nairobi. 

Foreign capital has reacted quickly. Already in January, the UN children agency UNICEF had announced it would make US$ 2.5 million available to assist the financing of the school reform. Some 1.5 million pupils that had previously dropped out of school due to the fees suddenly wanted to enrol, and UNICEF now is supporting government efforts to supply school materials and extra teachers. 

Also the UN earlier in February announced it would invest US$ 13 million in expansion of the Nairobi UN headquarters to "signal support for Kenya." At the same time, the IMF has met with the new government and expressed its support of the new efforts to fight corruption. 

Support and financing from the World Bank and the IMF normally is a precondition for other financial players - such as other bank and donor countries - to engage in a developing country. The price usually is a wave of privatisation of state utilities.

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