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The European Commission (EC) is to provide some 125 million euros (US $147.3 million) in budget support and technical assistance to strengthen poverty-alleviation programmes in Kenya, the EC delegation in Nairobi announced on Tuesday.
A financing agreement to facilitate the disbursement of the Poverty Reduction Budget Support II Programme (PRBSP II) had already been signed between the Kenyan government and the EC, the organisation said in a statement.
The programme seeks to enhance macroeconomic stability and stimulate economic growth in Kenya by reducing borrowing and reversing the rise in domestic debt burden.
The funding would also support Kenya’s efforts to reorient public finances towards capital investment and the provision of services aimed at reducing poverty. The EC said it is also intended to provide incentives to help the country achieve key development targets in the health and education sectors.
In line with the specific preconditions in the financing agreement for programme, Kenyan authorities over the past year have obtained parliamentary approval for a programme designed to provide a strengthened institutional and legal platform for improved public financial management, including public procurement, the EC said. A reform of the budget process had also been undertaken.
Disbursement of the first tranche of 50 million euros ($59 million) under the programme will be made soon. Subsequent installments will depend on satisfactory implementation of the overall macroeconomic reform and on the government's performance in the critical areas of public financial management, health and education, the European body added.
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