AfDB loans Kenya $540 million

The head of the African Development Bank unveiled a $540 million loan for Kenya yesterday and said he saw east Africa's biggest economy recovering from a post-election crisis to grow at 7 per cent.

Kenya was rocked by ethnic and political violence at the start of the year following a disputed presidential election in December. But a grand coalition government forged in April after weeks of peace talks has restored stability.

"I'm extremely encouraged and bullish about Kenya," AfDB president Donald Kaberuka told a news conference in Nairobi.

"I'm quite confident that if we can get fertiliser to farmers on time, and if the progress being made by the coalition government can continue, I don't see why Kenya cannot maintain a growth figure of 7 per cent and above."

Kenyan officials have forecast growth slowing to 4.5 per cent this year from 7 per cent last year due to the violence.

Kaberuka said the government was aiming for double-digit growth long term. But he said that would require significant investment in areas like infrastructure and energy.

He said the negotiated solution to Kenya's political turmoil - in which some 1,500 people were killed and more than 250,000 forced from their homes - provided a possible example of how best to deal with other problems on the continent.

"Kenya walked to the brink but was able to pull back at the right moment, thanks to the courage of its leaders and support of it friends," Kaberuka said.

But he stressed that there were many challenges ahead for the government and its people, and no quick fixes.