Inclusive Growth and Fiscal Management Development Policy Financing

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The program development objectives of the Inclusive Growth and Fiscal Management Development Policy Financing Project for Kenya are to: (i) crowd in private investment and financing for affordable housing; (ii) enhance farmer incomes and food security; (iii) create fiscal space to allow the government to invest in key development programs; and (iv) crowd in private investment and leverage digitization to support the government’s inclusive growth agenda.The proposed Development Policy Financing (DPF) is the first in a programmatic DPF series of two operations in support of the Government of Kenya’s (GoK) reform program to further enhance economic growth and make it more inclusive.The proposed operation is directly linked to the GoK’s “Big Four” inclusive growth agenda. Two of the pillars of the proposed operation are directly linked to two of the “Big Four” priorities (affordable housing - pillar 1; and farmer incomes and food security– pillar 2), while the other pillars address foundational issues that underpin the achievement of the “Big Four” and the broader inclusive growth agenda. The choice of the two pillars of direct focus in the proposed operation reflects a combination of factors including potential impact on the poor, available analytical evidence to underpin reforms, level of existing World Bank engagement in the respective areas, including complementarity with other World Bank projects, appropriateness of instruments to address the identified challenges, and reform momentum by the Kenyan Government.The third and fourth pillar of this proposed operation are foundational and will be critical for all four of the government’s priority areas and the broader inclusive growth agenda.The current operation benefits from strong government engagement, as it is well situated within the stated “Big Four” priorities of the government.The CPS has three domains of engagement: (i) competitiveness and sustainability – growth to eradicate poverty; (ii) protection and potential – human resource development for shared prosperity; and (iii) consistency and equity – delivering a devolution dividend.This DPF complements the World Bank’s support to Kenya being provided through Investment Project Financing (IPF) and Program for Results (PforR) operations. The Performance and Learning Review of the Kenya Country Partnership Strategy, the draft Kenya Country Private Sector Diagnostic and emerging pathways from the Systematic Country Diagnostic (SCD) (under preparation) point to the increasing importance of policy and institutional reforms to accelerate the pace of achievement of the twin goals.

World Bank Group

Project

Water Supply and Storage, Waste Processing and Treatment, Raw Materials, Government