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Kenya confirm U.S. $750 million dollars loan from World Bank

NAIROBI (Xinhua) -- The World Bank said on Wednesday it has approved a 75 billion shilling (about 750 million U.S. dollars) loan for Kenya to support its reforms in agriculture, housing, digital technology and fiscal management.

The loan will support Kenya’s reforms to enhance inclusive growth, accelerate poverty reduction and achieve its Vision 2030 objective of becoming a middle-income, industrialized country, the World Bank said.

President Uhuru Kenyatta at UN-Habitat Assembly in Nairobi | Coastweek

  "Measures supported by this operation are expected to benefit ordinary Kenyans through better targeting of agricultural subsidies to reach low-income farmers, prosecuting those who engage in fraudulent procurement practices, increasing availability of affordable housing, and improving revenue mobilization," Felipe Jaramillo, World Bank country director for Kenya, said in a statement issued in Nairobi.

The operation creates a foundation for essential reforms for fighting corruption, liberalizing markets, and enhancing inclusive growth, Jaramillo said. The loan lends support to the government’s "Big Four" agenda, which prioritizes agriculture, affordable housing, universal health coverage, and manufacturing, the statement said.

The approval came after Kenya raised 2.1 billion dollars in a sovereign bond issue in mid-May to finance some of the infrastructure projects, budgetary expenditure and to refinance part or all of the obligations outstanding under a 2014 Eurobond of 750 million dollars, which is due on June 24, and part of the other debt obligations.

NAIROBI (Xinhua) -- President Uhuru Kenyatta [center] looks at a design of a solar system of the new office facility at the United Nations headquarters during the opening ceremony of the first session of the UN-Habitat Assembly in Nairobi. XINHUA PHOTO - FRED MUTUNE

According to the World Bank, Kenya has been one of the fastest growing economies in sub-Saharan Africa over the past decade.

"For this growth to be sustained into the future and help reduce poverty, critical reforms are required," it said.

World Bank Task Team Leader Allen Dennis said the policy and institutional reforms supported by this operation will help improve the standard of living of ordinary Kenyans.

"The policy reforms will contribute to improving good governance by the reinforcement of accountability and enforcement mechanisms through the use of digital technologies," Dennis said.


Kenyan bourse receives approval to launch derivatives exchange market

NAIROBI (Xinhua) -- Kenya’s financial market regulator on Wednesday granted approval to Nairobi Securities Exchange (NSE) to launch and operate the Derivatives Exchange Market.

The Capital Markets Authority (CMA) said the derivatives market will provide an appropriate avenue for investors to both diversify their portfolio as well as protect investments from the volatility of the securities market.

"The approval granted to the NSE to operationalize a derivatives market marks the achievement of a flagship project under the Economic Pillar of Kenya’s Vision 2030, Paul Muthaura, CMA chief executive officer, said in a statement issued in Nairobi.

A derivatives market involves the trading of financial instruments like feature contracts, stocks, indices, commodities, currencies, exchange rates, or the rate of interest.

Muthaura said the derivatives market will facilitate deeper and more liquid capital markets and position Kenya closer to becoming the "heart of capital markets investment in Africa," as envisioned in the Capital Markets Master Plan.

The approval move follows the successful completion of a six-month derivatives pilot test phase conducted between July and December 2018, and resolution of key issues that emanated from the test phase.

According to CMA, the derivatives market will initially offer investors Equity Single Stock Futures (SSF) and Equity Index Futures (EIF) and later introduce other financial and commodities derivatives.

Matthew Mukisu, manager at the Derivatives Unit, observed that a robust infrastructure has been set up to facilitate trading, risk management, clearing and settlement.

Two banks, Stanbic Bank and the Co-operative Bank, have been approved by their primary regulator to provide clearing and settlement for the Derivatives Exchange Market.




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