The clarification that the stimulus measures announced last week by President Uhuru Kenyatta are long-term and not just meant as relief during the Covid-19 crisis, is welcome news for the economy.
Treasury Secretary Ukur Yattani says the incentives, including cuts on income tax, value-added tax and sales levy are not tied to the end of the coronavirus pandemic and would be maintained until the economy stabilises, offering a ray of hope for citizens already struggling with the high cost of goods and services, including healthcare.
The threats of an economic recession following the repercussions of the corona pandemic are becoming clearer each day and it is only fair and just that the country adopts sufficient padding to keep businesses and government operations on a sound financial footing to ensure the economy gains growth momentum.
Turmoil in the stock markets, which has pushed stock prices into the bear territory, is a reflection of the magnitude of the problem that the country could face in coming months unless action is taken to ensure that the slide is checked and reversed even as Kenya prepares for worst-case scenarios with regard to the pandemic. That the economy could shrink further is not in doubt but the extent to which this could happen is within the control of policymakers if they take appropriate measures, including providing incentives to businesses and cushions for households.
Now that the Executive has acted, the responsibility is on Parliament to expeditiously approve the stimulus recommendations by the President when debate begins on the floor of both Senate and National Assembly.
Desperate times such as these demand that parliamentarians rise above partisan interest and put the country first and in the interest of the public. The government should, however, not rest on its laurels even if these interventions are approved by Parliament. Stabilising the economy would require more work over the short and medium-term, meaning that policymakers ought to continue identifying and addressing areas where interventions are needed.
The country faces other challenges such as food insecurity due to the locust invasion and flooding, especially in western Kenya. This could also spark health challenges that will need to be addressed in the short term.
The government’s in-tray is full for now and coordinated intervention on socio-economic fronts will be making a big difference. This demands focus and agility. That is what we are calling for.