The Africa Development Bank Group (AfDB) has approved an investment of $930m in Kenya over the next five years to strengthen the economy through infrastructure development and more direct measures aimed at enhancing job creation.
Gabriel Negatu, Regional Director for the AfDB’s Eastern Africa Resource Centre, told a Nairobi audience that the Country Strategy Paper (CSP) approved by the board has articulated the bank’s priority areas for support to Kenya from 2014 to 2018.
He said: “To achieve our main objective, we have designed the CSP around two main pillars: to support the government’s effort to enhance physical infrastructure to unleash inclusive growth and secondly, to develop skills for the emerging labour market in Kenya’s transforming economy.”
Negatu noted that under the first pillar the AfDB would establish a more conducive environment for the private sector by increasing the affordability of doing business through investments in transport and utilities, improving connectivity and reducing overheads.
In the energy sector the AfDB is aiming to reduce the cost of electricity and make supply more reliable and accessible, supporting Kenya’s MTP II objectives to increase rural and urban access rates by 50% and reduce the cost of electricity by 50% by 2018.
“At enterprise level, this will boost private-sector activity, increase productivity, stimulate structural transformation, and generate employment, and promote gender-balanced inclusiveness,” he said.
He added that the bank’s recently revised credit policy for non-concessional borrowing had also allowed Kenya access to sovereign-guaranteed loans from the bank’s private sector lending window.
These objectives under AfDB’s new CSP can be broadly viewed as a continuation of the 2008-2013 CSP that also focused on supporting the country’s growth ambitions, infrastructure development and employment creation as its overarching objectives.
AfDB will also be exploring ways of restructuring poorly performing operations in its portfolio or cancelling them, and redeploying the freed-up resources to existing or new investments and address fresh developmental challenges.