KEPSA participated in the Validation Exercise regarding Kenya External Resources Policy (KERP) 2025 Draft, which took place on 26^th June 2025 at Panari Hotel, Nairobi. The draft policy document addresses the gaps that had been identified in KERP 2014. The Key areas addressed in the new draft policy document include:

1. Policy Evolution and Scope Expansion: The revised policy broadens its scope beyond Official Development Assistance (ODA) to include diverse financing instruments like sovereign bonds, climate-linked funds, diaspora bonds, blended finance, and Public-Private Partnerships (PPPs). This expansion aligns with Kenya's Vision 2030, the Fourth Medium-Term Plan (MTP IV), the Bottom-up Economic Transformation Agenda (BETA), and global frameworks such as the Sustainable Development Goals (SDGs) and the Paris Agreement.
2. Strategic Alignment and Ownership: The policy emphasises aligning external resources with national and county development priorities, ensuring coherence with fiscal frameworks. It promotes national ownership by using country systems like IFMIS and e-PROMIS and phases out parallel Project Implementation Units (PIUs).
3. Institutional Coordination and Capacity Building: The policy strengthens coordination between national and county governments, development partners, and non-state actors through Sector Working Groups (SWGs) and focuses on capacity building for government officials.
4. Debt Sustainability and Fiscal Prudence: It embeds debt sustainability analyses and risk-informed financing into external borrowing decisions, prioritising concessional and semi-concessional instruments for high-impact projects.
5. Efficiency and Absorption Capacity: The policy streamlines project approval and disbursement processes, integrating digital platforms for real-time tracking of external resources and project performance.
6. Adaptability and Innovation: A five-year review cycle ensures the policy remains responsive to global and national financing trends, promoting digital innovations and mainstreaming climate resilience, gender equality, and social inclusion.
7. Governance, Transparency, and Accountability: The policy enhances transparency through mandatory public disclosure of external financing agreements and project outcomes, strengthening audit and oversight mechanisms.
8. Monitoring, Evaluation, and Learning: A results-based framework tracks disbursements, project outcomes, and compliance with environmental and social safeguards, introducing learning mechanisms for policy adjustments.
9. Implementation Framework: Clear roles and responsibilities are defined for stakeholders, with structured timelines, performance indicators, and reporting mechanisms to ensure accountability and alignment with development goals

KEPSA propositions concerning the KERP 2025 Draft include:

• Tracking down the audit queries raised by the Auditor General and regular updates on the progress, through an online dashboard. The public will have access to the updates and hold the relevant office accountable
• External Resource Policy should be alignment with national interest and culture. This will deter the country from being held at ransom, occasioned by receiving funds that are tied with stringent conditions, such as cultural changes and prioritizing interests that are contrary to the country`s interest.
• Credit rating; As a country, we need to be keen on how our economy is rated by the global rating agencies such as Moody Analytics and S&P. When the country’s credit ratings of an economy is downgraded, this makes the sovereign bonds expensive, in the long run leading to crowding out of money from the private sector.