The World Bank has withheld a KSh96.9 billion ($750 million) budget support loan to Kenya, pending the enactment of key reforms and policy actions aimed at strengthening governance, financial discipline, and regulatory oversight.
In what marks a major policy standoff, the Bank has set out 11 reform conditions, including the passage of seven new laws and four policy amendments. These measures cover areas such as competition law, financial transparency, social protection, and environmental management.
Among the priority reforms is an amendment to the Competition Act to rein in dominant firms, along with updates to Kenya Information and Communications (KICA) regulations that would allow refugees to register SIM cards and access mobile money platforms like M-Pesa. The Bank is also pushing for a sovereign sustainability-linked financing framework and an urban transport policy encouraging commuters to use rail systems.
The World Bank further wants the full rollout of e-procurement systems across all government departments and the consolidation of public bank accounts under a Treasury Single Account managed by the Central Bank of Kenya. The disbursement, which was initially expected before June 2025, has now been delayed until the reforms are completed.
In addition, the Bank is demanding the implementation of regulations for the Conflict of Interest Act and the Social Protection Act, as well as uniform procedures for county licensing. Amendments to the Forest Conservation and Management Act and faster approval frameworks for County Additional Allocations Bills have also been flagged as priorities.
Kenya had already unlocked part of its three-year Development Policy Operation (DPO) funding envelope after passing the Conflict of Interest and Social Protection laws, but the World Bank now insists on the actual implementation of regulations before releasing additional tranches.
The freeze underscores rising scrutiny over Kenya’s reform agenda as the government seeks external financing to plug budget deficits. Analysts say compliance with the World Bank’s conditions could improve fiscal transparency but might also slow disbursement timelines for critical budget support.
