World Bank’s Sh12bn boost for jobs

Desperate young Kenyans can look to the future with renewed hope after the World Bank approved a generous injection of funds aimed at job creation. The bank will also support reforms geared towards good governance and efficient services in local authorities.

The Bretton Woods institution gave Kenya a Sh12.3 billion loan to finance the two programmes. Sh7.7 billion will go to municipal reforms while Sh4.6 billion will fund youth empowerment programmes.

Both loans were approved on standard terms of a 40-year maturity with a 10-year grace period provided by the International Development Association (IDA) — the World Bank’s concessionary lending arm.

The municipal programme would focus on strengthening local governance, institutions, and physical infrastructure, with the ultimate objective of improving service delivery in 15 municipalities. It will also improve the viability of the five largest cities and all provincial capitals.

“Kenya’s municipalities are critical to economic growth and regional equity but are operating far below their potential, due to infrastructure bottlenecks, weak finances, and poor management,” said a statement from World Bank country director for Kenya Johannes Zutt.

He said that rapid urbanisation had left Kenyan cities with a huge unmet demand for critical infrastructure and basic services thus constraining productivity of businesses and negatively affecting quality of life of residents.

The municipal programme would support Kenya’s Vision 2030, which identifies urbanisation as one of the key development challenges, and will deepen the reforms that the government has undertaken since 1996 to strengthen accountability by local authorities.

The Kenya Youth Empowerment project would support the government’s efforts to increase access to youth-targeted temporary employment programmes and to improve youth employability.

Young people in Kenya face serious challenges, including high rates of unemployment and underemployment with the overall unemployment rate for youth double the adult average.

“Kenya, like many other African countries, is struggling to manage a growing population of youth, of whom about one in five are neither in school nor working,” Mr Zutt said, “while Kenya’s youth can be an asset and a source of growth, if they are neglected or marginalised they can also be a potent source of crime and violence”.

Working with the Kenya Private Sector Alliance (Kepsa), among others, the Youth Empowerment project aims to provide disadvantaged unemployed youth with opportunities to acquire training, apprenticeships, and short-term jobs to improve their long-term employability.

The government has renewed its commitment to addressing youth issues and youth unemployment has emerged as a top priority. A “Marshal Plan” for youth developed in 2007 emphasised the importance of a coordinated and multi-sectoral approach to addressing the problem of youth unemployment and idleness.

As part of Kenya’s stimulus package to address the global economic crisis, in April 2009 Kazi Kwa Vijana programme was launched, aiming to employ youth in rural and urban areas in labour-intensive public works projects implemented by different line ministries.

The Youth Empowerment project would focus on labour-intensive works and social services, private sector internships and training, and capacity building. This is the first public works programme targeting youth in Africa to be supported by the World Bank.

“In addition, the second component is highly innovative, using Kepsa as the implementing agency to ensure adequate links with the private sector and promote sustainability of the project activities,” said the bank’s Yasser El-Gammal. “This project will be an important opportunity to create lessons for possible expansion and replication elsewhere in Africa.”