NAIROBI, Kenya – The World Bank has conditioned the release of a $750 million (KSh 96.9 billion) loan on the full implementation of 11 significant legislative and policy reforms, delaying crucial budget support funds originally anticipated by June 2025. The stringent requirements, part of the World Bank's Development Policy Operation (DPO), are designed to enforce fiscal discipline, enhance governance, and stimulate private sector growth, placing the onus on the Kenyan Parliament and Executive to enact the changes before the funds are disbursed.

The DPO is a multi-year financing agreement, with an initial disbursement of $1.2 billion (KSh 155 billion) made in June 2023. Subsequent funding is tied to the attainment of agreed-upon reforms. According to reports from Business Daily on November 11, 2025, World Bank officials have held meetings with National Treasury Cabinet Secretary John Mbadi and National Assembly Speaker Moses Wetang'ula to emphasize that the conditions are non-negotiable and to hasten their implementation.

The 11 Conditions

The required reforms span fiscal management, market regulation, and social inclusion. Key among the demands is the full operationalization of a Treasury Single Account (TSA) to consolidate all government funds at the Central Bank of Kenya (CBK), a move aimed at increasing transparency and curbing the practice of spreading public funds across multiple commercial banks. Another major condition is the mandatory and full use of the e-procurement system for all government tenders to reduce corruption and insider dealing in public purchasing.

The World Bank has also mandated the enactment of specific regulations to support two recently passed laws: the Conflict of Interest Act and the Social Protection Act. The Conflict of Interest Act is central to the anti-graft agenda, seeking to prevent public officials from benefiting from public procurement. The Social Protection Act aims to create a single registry for delivering cash transfers to vulnerable citizens.

Further conditions include:

• Amendments to the Competition Act to strengthen the regulation of firms with dominant market shares.
• Policy changes to allow refugees access to mobile money services like M-Pesa and to register for mobile phone services, a move intended to boost financial inclusion.
• The establishment of a clear policy to decongest urban transport, with an emphasis on encouraging the use of rail services.
• The creation of official guidelines for the issuance of sustainability-linked bonds to diversify Kenya's sources of cheap financing.

Fiscal Pressures and Economic Context

The delay in disbursement places additional pressure on President William Ruto's administration, which is navigating a challenging fiscal environment. The government has been pursuing a fiscal consolidation strategy to reduce the budget deficit and manage a public debt-to-GDP ratio that stands above the 55 percent sustainable threshold. The KSh 96.9 billion loan is a programmed part of the financing for the current fiscal year, and its absence creates a significant budget hole.

Treasury CS John Mbadi confirmed the delay, stating that the World Bank needed to conduct a debt sustainability assessment before releasing the funds. Discussions are reportedly ongoing to agree on additional measures to reduce the fiscal deficit, with the World Bank having previously suggested considering further consumption taxes, such as on VAT and excise duty. This comes after the government was forced to scrap planned tax hikes last year following widespread protests.

This reliance on conditional financing from Bretton Woods institutions highlights their growing influence on Kenya's domestic policy. As of September 2025, Kenya's outstanding loans from the World Bank stood at KSh 1.66 trillion, making it a primary source of concessional funding. The successful implementation of these 11 reforms is now the critical path to unlocking the next tranche of this vital financial support, with the timeline for parliamentary and executive action remaining under close scrutiny.