Kenyans in the diaspora will have an opportunity to contribute to Kenya’s economic transformation through an innovative dollar bond.
The diaspora bond will be structured by the World Bank’s Multilateral Investment Guarantee Agency (MIGA) and the National Treasury.
This follows a discussion between Prime Cabinet Secretary and Foreign Affairs CS Musalia Mudavadi and MIGA’s Executive Vice President Hiroshi Matano.
Mudavadi who concluded a three-day visit to the US held talks with several senior officials.
They include the Chief Officer of the Development Finance Corporation (DFC) Scott Nathan and the Deputy Chief Executive Officer of the Millennium Challenge Corporation (MCC) Chidi Blyden.
“We are working on a secure bond that will offer better returns than interest rates in the source markets for our diaspora remittances," Mudavadi said.
"The bond will enable the government to diversify its public debt mix, reducing the country’s exposure to costly commercial debt," he said.
According to Mudavadi, MIGA estimates show that while Kenyans abroad remit more than Sh650 billion ($4.3 billion) back home annually, their savings in foreign banks could be similar or even more.
During his meeting with Nathan, the two discussed the 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 Botton-Up Economic Transformation Agenda (BETA) priority sectors.
Mudavadi called for investments in infrastructure, manufacturing and supply chain diversification.
This, he said, would unlock Kenya’s potential as a regional logistics hub for the United Nations operating and global investors in the Eastern Africa region.
The US development finance institution provides finance and investment guarantees.
It is also working 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 potential for organic pesticides," he said.
In the meeting with Blyden, they focused on how to expedite the implementation of a transformative urban mobility and growth initiative that will benefit commuters in Nairobi city
The climate-friendly urban connectivity project is funded by a Sh9.6 billion ($60 million) MCC grant.
It includes the development of a Bus Rapid Transit (BRT) network, bicycle and pedestrian pathways, crossways and overpasses.
"It will facilitate connectivity of matatu stops to the emerging commuter rail network and promote the mobility of women in urban areas," Mudavadi said.
MCC as an independent US government agency signed a threshold programme agreement with the National Treasury in New York in September 2023.
According to the PCS, the initiative will reduce commuter time and hence promote economic growth through increased productivity of workers and manufacturing firms.