25 May 2022


Lending Institutions, Health Care, and Human Capital

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Kenya is a developing nation located in East Africa. It has a population of approximately 46.1 million, and it is one of the fastest developing African countries. Kenya’s development agenda focuses on poverty alleviation, education, health, inequality, infrastructure development, and trade.

Lending Institutions 

Like most developing nations, Kenya is heavily reliant on IMF and World Bank loans (Githua, 2011). The loans from these lending institutions are used to cover budget deficits and facilitate development agenda. The financial support from World Bank and IMF often come with other forms of support, regarding expertise and improved diplomatic agenda. Kenya uses the loans to finance projects across different sectors, for example, Kenya is in the process of building an extensive road and rail transport network, and it uses the loans to fund the projects. The World Bank and IMF loans are used by developed nations, particularly the US to facilitate political and social developments in third world countries. The US and other wealthy countries state that Kenya should develop a democratic government that respects human rights if it wants to continue benefiting from the financial aid. World Bank funding for the healthcare and education have facilitated social progress in Kenya.

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However, over the years, Kenya has amassed a large IMF and World Bank debt, such that it is hard to determine whether the loans are encouraging or hindering development. For example, in 2010, Kenya had an international debt of Kenyan shilling 1, 487, 110 million which amounts to 53.9% of its GDP (Githua, 2011). Additionally, IMF and World Bank loans come with limitations; the lending institutions came up with policies that benefit developed nation and stifles development agenda in developing countries (Guven, 2012). The structural adjustment programs have condemned Kenya as a dumping ground for expensive western-produced goods, while it sells its valuable raw materials to the developing nations cheaply.

Ways in Which a Healthy Population Strengthens Economic Growth 

The Kenyan healthcare system attempts to meet the basic healthcare needs of its citizens. There are health centers and dispensaries across the country offering outpatient services for simple ailments (Rabkin et al., 2017). There are district and national referral hospitals that deal with severe diseases. Kenya’s growth shows that a healthy population strengthens economic growth.

The four ways in which a healthy population enhances economic growth are the presence of healthy and productive citizens, reduced expenditure on preventable diseases, and GDP growth from increased income, and increased life expectancy that encourages productivity up to old age. A healthy population is made up of productive individuals who will engage in revenue generating activities. Healthy people have the physical and mental capabilities to participate in productive activities instead of relying on others to meet their basic needs (Khan et al., 2016). Secondly, a healthy population reduces government expenditure on healthcare, particularly preventable diseases. Kenya spends approximately 7% of its GDP on healthcare, and a substantial amount is dedicated to preventable diseases like tuberculosis and yellow fever (Githua, 2011). With improved healthcare, government spending on healthcare will reduce, and the money will be dedicated to other revenue-generating activities. Thirdly, a healthy population will increase the nation’s GDP through increased productivity. Healthy individuals are productivity, they do not take time from their work for health reasons, and they make good use of their resources, consequently improving GDP. Lastly, a healthy population increases life expectancy and reduces mortality. Kenya’s life expectancy is at 61 years, and childhood and adult mortality rates are still high. Low life expectancy and high mortality rates increase dependency on the government, making the government lose a lot of money in the form of welfare programs.

The Degree in Which Kenyan Leadership has used Foreign Aid to Improve Healthcare System 

The Kenyan healthcare system is financed with funds from various sources, and foreign assistance from foreign donors is one of the sources of finance. The Kenyan leadership has come up with programs and policies to utilize the foreign aid to improve the health care system effectively. Kenya spends a bigger percentage of foreign aid on health in comparison to neighboring countries like Uganda and Tanzania. According to Janisch et al. (2010) between 2006- 2010, Kenyan leadership set aside 9.2% of the foreign aid to finance health projects.

Mohajan (2014) notes that the Kenyan leadership recently decentralized healthcare to improve accessibility to health services. The devolved healthcare system is characterized by free maternity and free health service for infants. Consequently, the infant mortality rate has reduced from 77 per 1000 live births in 2008 to 38.3 per 1,000 live births in 2014 (Mohajan, 2014). Kenyan government uses part of the foreign aid to fund different projects, and foreign aid has been quite useful in the management of HIV/AIDS in Kenya.

Though the Kenyan leadership has used a substantial amount of foreign aid in healthcare, the Kenyan healthcare system is still facing many challenges. One of the problems that should be addressed is corruption and poor management of foreign aid to ensure that the aid is used for its intended purpose.


Githua, D. W. (2013). The impact of International Monetary Fund (IMF) and the World Bank structural adjustment programmes in developing countries, Case study of Kenya (Doctoral dissertation).

Güven, A. B. (2012). The IMF, the World Bank, and the global economic crisis: exploring paradigm continuity. Development and Change , 43 (4), 869-898.

Janisch, C. P., Albrecht, M., Wolfschuetz, A., Kundu, F., & Klein, S. (2010). Vouchers for health: A demand side output-based aid approach to reproductive health services in Kenya. Global Public Health , 5 (6), 578-594.

Khan, H. N., Razali, R. B., & Shafei, A. B. (2016, November). On the relationship between health, education and economic growth: Time series evidence from Malaysia. In A. H. Bhat, N. B. Yahya, A. B. Ramli, H. Soleimani, S. B. Zakariah@ Zakaria, I. Faye, ... & A. F. B. Shafie (Eds.), AIP Conference Proceedings (Vol. 1787, No. 1, p. 080007). AIP Publishing.

Mohajan, H. K. (2014). Improvement of Health Sector in Kenya. American Journal of Public Health Research , 2 (4), 159-169.

Rabkin, M., Lamb, M., Osakwe, Z. T., Mwangi, P. R., El-Sadr, W. M., & Michaels- Strasser, S. (2017). Nurse-led HIV services and quality of care at health facilities in Kenya, 2014–2016. Bulletin of the World Health Organization , 95 (5), 353.

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