WASHINGTON, July 23, 2013 – The World Bank’s Board of Executive Directors has approved a zero-interest credit of $250 million to help Kenya fight extreme poverty by setting up a potentially transformational national social safety net program. The safety net, which will knit together several existing government programs into a better coordinated and more efficient system, aims to reach up to 3.3 million of the country’s poorest people by 2017.
While Kenya has registered strong economic growth over the past decade, 38 percent of Kenyans still live in poverty, especially in rural areas. The National Social Safety Net Program for Results approved today will cushion Kenya’s poorest and most vulnerable households from the worst effects of crises such as drought, malnutrition, and unemployment.
“The new national social safety net is a brilliant investment, as it will help families break the cycle of poverty in which they may have been trapped for generations,” said Diarietou Gaye, World Bank Country Director for Kenya. “Being cushioned against devastating income losses by a small but regular transfer of money from the program helps poor people afford consistent nutrition and healthcare, and keep children in school. With these basics in place, vulnerable households are far more likely to become part of an economy that’s on the move.”
The Safety Net will merge five existing programs—the Cash Transfer for Orphans and Vulnerable Children, the Hunger Safety Net Program, the Older Persons Cash Transfer, the Urban Food Subsidy Cash Transfer, and the Persons with Severe Disability Cash Transfer. The new program aims to gradually expand these existing efforts while achieving greater efficiency and coordination, including in targeting the most vulnerable people.
“Kenya, with its long history of various kinds of smaller cash and food transfer programs, is ready to join the global movement today among developing countries towards progressive and efficiently managed national social safety nets,” said Ritva Reinikka, World Bank Director for Human Development in Africa. “While the success of such broad national programs was first demonstrated in Brazil and Mexico, Africa has been swift to recognize their benefits, and safety nets have helped make rapid gains possible in countries like Ethiopia and Rwanda.”
This is the first time the World Bank is using the new Program-for-Results instrument to help build a social safety net system in Africa. The funds from the International Development Association (IDA*) will be disbursed to Kenya over the next four years as specific project milestones and results are achieved.
Key results for which funds will be disbursed include more households registered in the program; a large share of beneficiaries meeting the program’s targeting criteria; and evidence of timely and reliable payments.
* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing zero-interest financing and grants for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 81 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change for 2.5 billion people living on less than $2 a day. Since 1960, IDA has supported development work in 108 countries. Annual commitments have increased steadily and averaged about $15 billion over the last three years, with about 50 percent of commitments going to Africa.