Ensure stimulus plan has significant impact
Tuesday, May 26th, 2020
In the boldest plan yet by the State to fix the Covid-19 pandemic shocks, President Uhuru Kenyatta unveiled an eight-point economic stimulus package to unclock Sh53.7 billion to cushion the economy.
The bundle comes amid concerns that the health crisis has morphed into a hydra-headed monster ravaging all sectors and turning life as we have known and lived it on its head.
Without indications of when the economy will come out of the lockdown, the government must focus attention on strategies to reboot growth areas such as agriculture, small and medium scale enterprises, tourism, manufacturing and ICT.
The package is also specific on interventions in the tourism sector with soft loans, hiring 200,000 youths, 10,000 teachers and 5,000 health workers.
Targeting SMEs, the President’s move unlatched Sh10 billion to fast-track Value Added Tax refunds and other pending payments to stir the sector which is key to the economy, yet among those heaviest hit by the pandemic. Sh3 billion has been allocated to the SME Credit Guarantee Scheme as seed capital for affordable credit to SMEs.
However, this sector deserved more and there is need for a keener push for traction if the economy continues to be in lockdown.
With weakened financial muscle the sector, which is experiencing cash flow constraints more than ever, needs the cash if only to survive by meeting pending financial obligations.
As for the agriculture sector, it should get more money on top of the Sh3 billion given to supply farm inputs to only 200,000 small-scale farmers.
While the money may cushion some of the farmers from the effects of adverse weather and to secure food supply chains in the post Covid-19 period, the value chain must be considered in making farm inputs reach markets in good time.
More cash should also have gone towards assisting the horticultural sector which was given another Sh1.5 billion to access international markets during shortage of flights into and out of the country.
This way, the sector which employs millions of Kenyans, can cushion more employees and survive global shocks.
But the government must strive to go beyond the pronouncements and ensure there is delivery. It must also investigate the bottlenecks in the disbursement of money and other aid to vulnerable groups.