Age of choice: Kenya in the new development finance landscape

Research reports and studies
April 2016

National financing strategies will play a decisive role in implementing the Sustainable Development Goals.

But the development finance landscape has dramatically changed since the early 2000s: there are now more development finance providers than ever before, offering a new ‘age of choice’ in financing options to developing countries. Governments need to better understand the sources of finance and potential partnerships available to them if they are to capitalise on this age of choice in a way that effectively supports their national objectives.

Development finance flows to Kenya increased nearly fivefold between 2004 and 2014 in nominal terms dominated by official development assistance (ODA). ODA’s share has, however, declined slightly, with the rise of China as a lender and with Kenya’s recent access to international bond markets.

Speed of delivery is valued by the government, but not necessarily at the expense of cheaper financial terms.

The government manages relations with all donors, including China, through the usual government external resource management systems, led by the National Treasury. This was not the case in other countries reviewed for this project.

This study is one of a set of case studies examining the challenges and opportunities facing governments in managing this new context for development finance.