Economic stimulus programme has put Kenya on road to recovery

By Kamotho Waiganjo

The just released Economic Survey 2009 recorded many hopeful projections on the future of Kenya’s economy. It will be recalled that before the twin effects of the 2008 political crisis and the global financial meltdown, Kenya’s economy had become the envy of many and a study on how economies could be revived after many years of stagnation.

That came crashing down in 2008 and Kenya almost went back to recording negative growth in that year.

The 2009 survey and the prospects of 2010 were therefore gratifying especially as the country goes into an uncertain season defined by the politics of the upcoming referendum.

No doubt God has been kind, the weather has been good leading to a bumper harvest. The global economy is on the upswing, with consequential positive impact on Kenya.

But as I read the Survey, what fascinated me, hidden in the statistics and econo-speak, was a new programme that appeared to have made a mark on the economy. Until now, I had often heard of this programme in the context of controversy especially because it was usually confused with the much maligned Kazi kwa Vijana project.

This is the Economic Stimulus Programme introduced in the Budget of 2009. At a time when global economies were considering how to jumpstart their collapsing economies, choices had to be made as to the most effective ways to generate growth. For some economies in the West, massive investments were made in the financial sector. Other governments reintroduced the hitherto discredited State ownership in private enterprise.

In Kenya, the Stimulus Programme, initially budgeted at Sh22 billion, was designed as a high impact and intensive programme and was expected to stimulate economic activity at the local level by creating employment opportunities, spurring entrepreneurial activities and supporting the building blocks that anchor a healthy, educated populace. It was fairly innovative, designed to meet short term needs but also provide a framework for long-term growth and sustainability. The programme consists of construction projects in education, health and social sectors, the enhancement of human resource capacity in the form of hiring of nurses and teachers, and in the facilitation of operations of the projects.

Reading the survey, it is clear that in its short life, the Stimulus Programme has had significant positive impact on the economy, particularly for young Kenyans. In a country where 65 per cent of the citizenry is below 40 years of age, any programme that does not deliberately and systematically target this sector fails the relevance test. It is also interesting that unlike the much defamed Sessional Paper No 10, the programme laid sufficient focus on marginal areas.

As we enter into a new budget cycle, it will be interesting to see how the lessons learnt from these challenges will define its future operationalisation.

—The writer is an advocate of the High Court