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Things look up for key sectors in Sh53.7b State spending plan

By Moses Michira | May 26th 2020

President Uhuru Kenyatta last week unveiled a Sh53.7 billion stimulus package that is expected to lift the economy, badly battered by Covid-19.

Among the biggest beneficiaries of the package are road works contractors whose dues worth Sh30 billion were paid on Friday.

The youth are the other big winners in the plan, with President Kenyatta saying 200,000 young people would be engaged to provide casual labour in a new programme dubbed Kazi Mtaani Initiative.

Their engagement would extend to repairs of public infrastructure – most of which has been damaged by the recent floods and the enhanced public hygiene programmes involving the deployment of locally-manufactured sanitisation booths in public spaces.

President Kenyatta’s plan on engaging the youth at a projected cost of Sh10 billion closely mirrors the controversial Kazi Kwa Vijana programme under his predecessor Mwai Kibaki.

“And to make it sustainable after the Covid crisis, we will regiment them into livelihood guilds. These are small groups of young people with a purpose and a passion for Kenya,” he said in a televised address to the nation on Saturday.

The youth will be employed through their respective county governments.

Maintenance of basic infrastructure, including roads and footbridges, is among the functions of counties, which are the intended beneficiaries of the president’s stimulus package.

Another Sh10 billion will be paid out in Value Added Tax refunds, a move that has been applauded by the Kenya National Chamber of Commerce and Industry (KNCCI).

The lobby’s president, Richard Ngatia, said the allocation for the refunds would help small businesses navigate the difficulties occasioned by the Covid-19 pandemic.

“The proposed stimulus package is very essential to support post-Covid-19 economic recovery measures since what is important is to support enterprise and manage liquidity initiatives and ensure we protect jobs and employment creation,” he said.

Among the initiatives that stood out for the 260,000-member lobby is the Sh3 billion worth of SME credit guarantee scheme for supporting 200,000 small scale farmers and the planned acquisition of 250,000 fabricated desks.

Minimise interactions

“The sectors hardest hit are in agriculture, horticulture, small traders, tourism, and service industry - restaurants, education and manufacturing. The Sh53 billion impetus packages provided will go a long way in ameliorating the unexceptional challenges brought about by the pandemic,” Mr Ngatia added.

Hotels were granted Sh2 billion, which would be accessed in credit under preferential and prospectively interest-free terms.

Hoteliers expect that the funds will be accessible through credit that will mainly be channelled for the improvement of their facilities to adequately respond to the challenges presented by Covid-19.

These include the enhanced hand-washing infrastructure in hotel facilities and the erection of separator glass panels for their front offices to minimise the physical interaction between visitors and staff.

Mike Macharia, the chief executive of the Kenya Association of Hotel Keepers and Caterers, said he hopes the funds will be disbursed as soft loans.

“There would be an immediate need for plumbing infrastructure for additional sinks for hand washing at the entrances,” said Mr Macharia.

He noted that all hotels are currently at zero capacity and are likely to remain so as long as the aviation industry is closed.

President Kenyatta hinted at a possible reopening of the economy, pending the evolution of the pandemic in what the hoteliers hope will breathe new life into the industry.

Rita Kavashe, the chairperson of the Kenya Motor Industry Association, termed the allocation worth Sh600 million for the acquisition of locally assembled cars a huge positive.

“It is a very outstanding development for our industry given the difficulty that we have encountered under Covid-19,” she said.

Demand for commercial and passenger vehicles dropped by about a third in April alone, Ms Kavashe added.  

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Covid 19 Time Series


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