Kenyans in the diaspora will have an opportunity to contribute to Kenya’s economic transformation through an innovative dollar bond, Prime Cabinet Secretary and Cabinet Secretary for Foreign and Diaspora Affairs Musalia Mudavadi has said.
Mudavadi noted that the Diaspora Bond will be structured by the World Bank’s Multilateral Investment Guarantee Agency (MIGA) and the National Treasury.
He spoke at a meeting with MIGA’s Executive Vice President, Hiroshi Matano.
“We are working on a secure bond that will offer better returns than interest rates in the source markets for our Diaspora remittances. The bond will enable the Government to diversify its public debt mix, reducing our exposure to costly commercial debt.” Mudavadi noted.
MIGA estimates that while Kenyans abroad remit over $4.3 billion back home annually, their savings in foreign banks could be similar or even more.
It is also leveraging green finance to promote economic and social transformation.
Mudavadi who concluded a three-day visit to the US also held talks with Scott Nathan, the Chief Executive Officer of the Development Finance Corporation (DFC) on potential investments for enhancing the government’s economic and social transformation agenda.
He urged DFC to invest in projects with high multiplier effects, to stimulate the growth of the Bottom-up Economic Transformation Agenda (BETA) priority sectors.
Investments in infrastructure, manufacturing and supply chain diversification, he said, would unlock Kenya’s potential as a regional logistics hub for the United Nations operations and global investors in the Eastern Africa region.
The US development finance institution provides finance and investment guarantees, is also working with the National Treasury on climate friendly initiatives including smart agriculture, clean energy and electric vehicles.
Its support for a pyrethrum processing project in Nakuru County has stimulated pyrethrum farming, enabling opportunities for local farmers to improve their livelihoods and enhancing Kenya’s export potential for organic pesticides.
Another meeting between Mudavadi and Chidi Blyden, Deputy Chief Executive Officer of the Millennium Challenge Corporation (MCC), focused on expediting the implementation of a transformative urban mobility and growth initiative that will benefit commuters in Nairobi county.
The climate-friendly urban connectivity project, funded by a $60 million MCC grant, includes development of a Bus Rapid Transit (BRT) network, bicycle lanes and pedestrian pathways, crossways and overpasses. It will also facilitate connectivity of matatu stops to the emerging commuter rail network and promote the mobility of women in urban areas.
MCC, an independent US government agency, signed a threshold program agreement with the National Treasury in New York in September 2023.
The initiative will reduce commuter time, hence, promote economic growth through increased productivity of workers and manufacturing firms.