The World Bank is prepared 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, Callisto Madavo, World Bank Vice President for Africa, told a press conference on Wednesday.
"We are working closely with the International Monetary Fund to see if we can provide budget support by releasing pending money that was held up before," Madavo told journalists in Nairobi.
Key conditions for the government, led by President Mwai Kibaki, 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, the privatisation of Telkom Kenya, and the introduction of bills curbing corruption and improving transparency (Anti-Corruption and Economic Crimes Bill and the Public Ethics Bill), he said.
The World Bank has been withholding two tranches of approximately US $50 million each because of poor performance on policy and project implementation, and bad governance, he said. The first tranche of US $52.4 million was released in 2000.
The National Rainbow Coalition (NARC) government had repeatedly indicated its determination to address issues of corruption, governance and transparency, he said, emphasising that the release of the funds "will depend on the performance meantime".
"We are very struck by how much is changing in Kenya, and is underway, how much is actually happening," he said. He wanted to "signal strongly the readiness of the World Bank to engage with the new government".
The US $40 and $50 million pledged to the education sector, and due to be released before the end of June, was not attached to any conditions, Madavo added.
The government has committed itself to an annual growth rate of between six and seven percent, as well as the creation of 500,000 jobs per year. To achieve this, said Callisto, it was imperative to boost the private sector by reducing transaction costs, and improving infrastructure and telecommunications.
In 2001, the World Bank gave a total of US $195.2 million to Kenya, which dropped to US $82.1 in 2002.
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