Coronavirus: Why many Kenyans feel let down

As the coronavirus pandemic swept through the world last week, and as countries unleashed million-dollar war chests (in loan guarantees and aid) to fight off the catastrophic effects the contagion was leaving in its wake, Kenyans could only hope for the best while preparing for the worst.

What is increasingly becoming obvious is that countries with well-oiled emergency response mechanisms will weather the storm. The world should worry about those who are ill-prepared, most of them in the developing world. Worst of all are countries whose leaders are still in denial, have mounted half-hearted attempts or are still groping in the dark. These ones will rue the missed chances to push back.

With nearly half a million confirmed cases across the globe and 13,000 deaths, the outlook is grim. Against all odds, mankind is literally racing to self-preserve. The curve must be flattened.

Yet the struggle to save lives and the livelihoods of millions is proving nightmarish for many governments, least of all ours.

The profound impact is seen in what has become of some of the world’s popular cities: New York’s Times Square is eerily deserted; the lights on Paris’ Eiffel Tower were turned off; the London Eye forlornly looks into the city’s skies. Milan, Paris, Madrid, Dubai, Barcelona known for their eclectic mixture of urban life have become ghost towns.

The OECD (a group of mainly rich countries) expects global economy to grow the slowest since 2009.

Our Thursday edition’s screaming headline — 'Mr President, time to boost the economy' — was a rallying call for more action to mitigate against the growing effects of the pandemic.

We recognise that the most effective intervention, besides urgent treatment, is putting money in people’s pockets to cater for rising health costs, food and to tide over the population until the pandemic is vanquished.

The rattled financial markets need to be calmed and the corporates reassured if only to secure jobs and get a grip of the situation. Moreover, these efforts are necessary to ensure that the dip is not so sharp and steep. It takes less effort to recover from a smooth curve. Moreover, research shows that assurances slows down pandemics and helps the population get back on its feet faster.

One way is to cut interest rates. Central Banks in Australia, Canada, Germany and France including the European Central Bank and the Bank of England have loosened policy.

Governments (including ours) have the wherewithal to make the pain less severe than it can get.

For Kenyan corporates, a lot of them have completely shut down. In spite of lost revenue from zero output, many of them will need to remit taxes, meet finance costs, fund operation costs and pay salaries. These companies need relief to stave off lay-offs and in worst-case scenarios, bankruptcies. And this is why many feel let down.

The government ought to come up with something, anything: Cut VAT, corporation tax, PAYE, provide cash incentives to SMEs…It could start for example by funding the banks; which in turn will offer liquidity to corporates, small business and to private citizens at a good rate. This will stabilise things a little bit. It could also encourage corporations to cut back on operating hours just to stay in business and keep the jobs. The thing is; government cannot just watch and bid its time as businesses shrivel up. It has the instruments to stop things from going from bad to worse as is likely going to happen.

Hundreds of billions worth of stocks on the Nairobi Stock Exchange was wiped out in a matter of days. With companies shutting down, the economy could be irredeemably shattered. That calls for urgent action.

The banking fraternity and the giant telcos have stepped forward. For an economy that was already depressed, that could amount to just a drop in the ocean. The risk is the spiral could get out of control. 

Companies were laying off, malls were already empty even before the outbreak and shops and kiosks and mama mbogas were recording the lowest sales in years.

Matters are not helped by the fact that our e-commerce (purchase and delivery) does not account for much due to poor infrastructure and low trust levels.

Yet there are good lessons to pick from out there.

In disease-ravaged Italy, the government has scrambled $25 billion; the UK announced a $390 billion rescue package; US ($1 trillion), Germany ($560 billion), France ($350 billion), Spain ($205 billion).

The worst of times ought to bring out the best in us. In the midst of the gloom and doom of the Covid-19 lie fundamental lessons for the country; that seldom do we make hay while it shines.

Indeed, the outbreak has also exposed our collective unpreparedness during emergency.

Mr Kipkemboi is The Standard’s Associate Editor for Partnerships and Projects. [email protected]