In Summary
  • The government intends to hire an additional 5,000 healthcare workers with diploma or certificate level qualifications on one-year contracts.
  • A total of Sh2 billion will be set aside to support renovation of facilities and the restructuring of business operations by actors in the industry.

The government will hire 200,000 youths to clean towns, 10,000 teachers and 5,000 health workers as part of a stimulus package unveiled Saturday.

It will also engage 1,000 ICT interns to support digital learning, 5,500 community scouts under the Kenya Wildlife Service and thousands of casual labourers to rehabilitate roads across the country.

Businesses in the ailing tourism sector will also receive soft loans to help them out.

This is after President Uhuru Kenyatta announced a Sh53.7 billion eight-point economic stimulus programme, the boldest plan yet by the Jubilee administration to fix the unfolding economic crisis brought by the Covid-19 pandemic.

President Kenyatta said the pandemic is quickly moving from a health crisis to an economic one, with hundreds of thousands of jobs lost and businesses closed with very little economic activity going on.

He said the injection of the money into the economy would stimulate growth and cushion families and companies. “To combat the effects of this downturn, my administration has had to take additional measures,” President Kenyatta said.

Later in his speech, he hinted at the inevitability of reopening the economy by easing restrictive measures put in place to slow the spread of the virus.

Infrastructure

The first element of the eight-point plan is infrastructure, which had Sh5 billion set aside for it.

Due to the ongoing rains, road infrastructure has been adversely affected across the entire country.

The government will use this amount to hire local labour to rehabilitate access roads, footbridges and other public infrastructure.

It is hoped that this will generate construction jobs for Kenyans across the country.

The government also hopes that with the use of local labour and construction materials, in line the “Buy Kenya Build Kenya Policy”, the money will stimulate and support micro and small business enterprises.

Education

Education is the second element of the stimulus programme. President Kenyatta has allocated an additional Sh6.5 billion to the Ministry of Education to hire 10,000 teachers and 1,000 ICT interns to support digital learning.

The funds will also support the improvement of school infrastructure, including acquisition of 250,000 locally fabricated desks.

“The aim is to get thousands of our graduates off the bench and into action while we support local artisans and builders’ businesses,” President Kenyatta said.

SMEs

The third element of the plan targets small and medium enterprises (SMEs). Sh10billion of the stimulus package has been allocated to fast-track payment of outstanding Value Added Tax (VAT) refunds and other pending payments. Another Sh3 billion has been set aside as seed capital for the SME Credit Guarantee Scheme. The President said this would provide affordable credit to SMEs.

Health

President Kenyatta said the government intends to hire an additional 5,000 healthcare workers with diploma or certificate level qualifications on one-year contracts.

“This will not only enhance our Covid-19 response capability but also enhance the implementation of the Universal Health Coverage (UHC) programme,” he said.

The President also set aside Sh1.7 billion for the expansion of bed capacity in public hospitals. He encouraged the Ministry of Health to utilise the Jua Kali sector in this endeavour.

More resources will also be pumped into medical research facilities to enhance their capacity, which is critical to generation of new innovations in the medical field.

Agriculture

The fifth element of the stimulus programme is agriculture. To this sector, the government will spend Sh3 billion on the supply of farm inputs through e-vouchers targeting 200,000 small-scale farmers.

This is meant to cushion farmers from the effects of adverse weather, and to secure food supply chains in the post Covid-19 period and into the future.

Further, under this element, another Sh1.5 billion has been set aside to assist flower and horticultural producers to access international markets, in a period where there is a shortage of flights into and out of the country.

Tourism

The tourism sector is set to be one of the biggest winners in the stimulus package.

President Kenyatta said this sector has suffered the most because of restricted movements and suspension of international flights.

To this end, the government plans to provide soft loans to hotels and related establishments through the Tourism Finance Corporation (TFC).

A total of Sh2 billion will be set aside to support renovation of facilities and the restructuring of business operations by actors in the industry.

Funding will also be set aside to support the operations of Utalii College to guarantee the steady supply of well-trained hospitality professionals.

The tourism component will also engage 5,500 community scouts under the Kenya Wildlife Service at a cost of Sh1 billion.

Additionally, support will be made available to about 160 community conservancies at a cost of Sh1 billion.

Environment and water

To mitigate the impact of deforestation and climate change and to enhance the provision of water, the stimulus plan will rehabilitate wells, water pans and underground tanks in the arid and semi-arid areas.

For this purpose, the government has set aside Sh850 million.

A further Sh1 billion has been set aside for flood control measures and Sh540 million for the Greening Kenya Campaign.

The final element of the stimulus programme is manufacturing. President Kenyatta said he has set aside an initial investment of Sh600 million to purchase locally manufactured vehicles.

This is expected to sustain the operations of local motor vehicle manufacturers.

He urged Parliament to speedily consider the Budget proposals before that are expected anchor the economic stimulus programme.

President Kenyatta noted that whenever the government talks about the economy, it bombards Kenyans with figures and statistics without a human face.

Yet behind these figures are real lives. “There is a hard-working farmer who mixes his sweat with the soil in order to feed his or her family and our communities; a diligent mother who has the double role of nurturing the family and maintaining a full-time job,” he said.

“An aspiring and driven young person with hopes and dreams for tomorrow, and an impatient teen who cannot wait to grow up and be a part of the game.”

The President said the coronavirus pandemic would continue undermining government efforts to revitalise the economy for the foreseeable future.

“The rate of infections may surge if we fail to comply with the protocols issued by the Ministry of Health. It is my prayer that we heed the call and conduct ourselves with responsibility,” he said.

Employment

By Saturday morning, Kenya had cumulatively tested 57,650 samples, out of which 1,192 persons had tested positive for Covid-19, with 50 having succumbed.

He said the government is dispatching Sh250 million every week to vulnerable families.

It is hoped this money will catalyse local economies from the bottom up across the country as the recipients use it to buy food and take care of other household needs.

“We noted that half the financial resources given to relief suppliers were lost to brokers and logistics. Very little of such resources reached the targeted groups,” he said, explaining why the government had chosen direct transfers.

The government has also spent billions of shillings to deal with the unemployment crisis among the youth.

The administration is counting on the National Hygiene Programme, also known as the Kazi Mtaani Initiative, to put about 200,000 youth to work.

In the programme, Sh10 billion will be used to engage the youth in restoring public hygiene standards, urban civil works and other public undertakings. During the pilot phase, about 26,000 were engaged.

“Working with county governments, we will look for ways of generating work for them. We are making this endeavour through an urban renewal programme to upgrade and to modernise our towns and cities. We want our towns to be clean and green, just like Singapore is,” President Kenyatta said.

Economist George Bodo of Callstreet Research and Analytics said the fact that a significant amount of the package will be used to settle bills – particularly VAT refunds and pending bills – means the measures are “not sufficient”.

He added: “The economy needs as much as Sh150 billion and the bulk of this should be towards credit guarantee for small businesses. Stimulus programme is supposed to introduce new spending,” he said.