MPs Question Use of Ksh.16 Billion World Bank Loan for Livestock Insurance Scheme

The National Assembly Committee on Public Debt and Privatization has raised concerns over the utilization of loans acquired by the government to fund projects under the State Departments, focusing particularly on the Ksh.16.082 billion World Bank loan aimed at the De-Risking, Inclusion, and Value Enhancement of Pastoral Economies (DRIVE) project. The DRIVE initiative, part of the Horn of Africa’s efforts, seeks to provide critical support to pastoralists by offering livestock insurance, access to financial services, and financial literacy education to mitigate the impacts of severe droughts.

During a Thursday session, Livestock PS Jonathan Mueke was summoned to provide updates on the loan’s status and the project’s progress. Legislators questioned whether the project is delivering value for money and if the loan was necessary given the country’s ongoing fiscal challenges. Committee Vice-Chairperson Makali Mulu voiced concerns: “As a committee, we have noticed that some loans we have borrowed were not worth borrowing. When will all the borrowed money be utilized, and have Kenyans gotten value for this borrowed money, or would we have achieved results using the locally available loans?”

PS Mueke clarified that the DRIVE project is being executed in phases with funding from various partners, not solely relying on the World Bank. He outlined that the project is divided among different implementing bodies: ZEP-RE, managing DRIVE Component 1 with Ksh.8.615 billion funding, and Kenya Development Corporation (KDC), overseeing DRIVE Component 2 Part 1 with Ksh.4.995 billion. The State Department for Livestock Development is responsible for DRIVE Component 2 Part 2, involving project management and daily operations, supported by Ksh.2.872 billion.

The committee also reviewed the status of other loans, including a Ksh.35.4 billion (USD 275 million) loan acquired from the International Development Association in June 2022 for the National Agricultural Value Chain Development Project. Agriculture PS Kipronoh Rono reported a 49 per cent absorption rate, with Ksh.5.4 billion already spent on the project as of June 2024. Additionally, the government secured a second loan of Ksh.4.2 billion to support the Build Resilience for Food and Nutrition Security (BREFONS) program, targeting climate change and food insecurity issues.

The DRIVE project, launched in 2023, aims to combat climate shocks for pastoral communities in Kenya, Ethiopia, Somalia, and Djibouti. It is expected to assist over 250,000 households, equating to 1.6 million pastoralists and their dependents over five years. In Kenya, over 150,000 pastoralists in the Arid and Semi-Arid Lands (ASALs) are set to benefit from the initiative.

Despite these assurances, lawmakers remain skeptical about the necessity and management of the borrowed funds, highlighting the broader concern of fiscal prudence during challenging economic times. The scrutiny of these loans underscores the critical need for transparency and accountability in the implementation of government-funded projects to ensure that the intended beneficiaries, in this case, pastoralists, receive the promised support and resources.