Treasury must do all to spur growth
Tuesday, September 14th, 2021 00:00 | 2 mins read
The launch of the Economic Survey 2021 that painted a brighter future for the economy is welcome news on the back of a pandemic that contracted growth by -0.3 in 2020.
This is in sharp contrast to 2019 when the Gross Domestic Product grew by five per cent.
The launch of the delayed survey, therefore, is a timely wake-up call to the Treasury to put its act together.
Even as full resumption of activities in key economic sectors is expected to start in full swing, recovery is still slow, and will require more stimuli to spur growth.
Resumption of learning in schools and semblance of sanity in the hospitality industry, which had almost halted for the better part of 2020, is good news for the economy.
While the latest survey pointed out that key macroeconomic indicators are likely to remain stable and supportive of growth in 2021, the manufacturing and transport sectors are expected to deepen the growth.
Amid all the enthusiasm wrought by the survey, the rosy patch as it may seem on paper has many landmines that the Treasury must clear to help the country deal with the challenges ahead.
Indeed, the Treasury is well aware of the challenges experienced every election cycle, and how uncertainty that come with this period blow the wind out of the sails.
This particular election will be unique in that campaigns begun immediately after the last poll and going by the current political environment, the months ahead are likely to be difficult.
Treasury must also take note that the pandemic can pull an economic surprise anytime.
The good news, however, is that vaccines are now widely available but they are only useful if Kenyans turn out in large numbers to be vaccinated.
As the Treasury basks in the glory of increased tax collections, it must not lose sight of the need to tame runaway appetite for debt. It must deepen austerity measures and hope there is enough rain.
But claims Kenya will leverage key sectors particularly on the ICT and manufacturing sector to spur growth might come a cropper amid stakeholder complaints of a punitive business environment.
This raises fundamental questions about the government’s ambition. For example, wouldn’t it make more economic sense if the growth areas were provided with the right conditions to thrive?
Whichever way, Treasury must avoid a scenario where the goose that lays the golden egg is denied essentials for growth.