Treasury’s take: Impact of Covid-19 on Kenya’s Economy
The outbreak of the Covid-19 pandemic in 2019 has caused the most severe global economic setback. Its impact to our economy includes:
- Loss of lives
- Decline in demand of Kenya’s goods and services,
- Job losses,
- Decline in household earnings,
- Heavy public expenditures towards health sector and social
- protection,
- Decline in revenue due to subdued economic activities.
Kenya’s GDP is projected to decline to 2.5 % in 2020 compared to a growth of 5.8 % in 2019.
Post-Covid-19 Economic Recovery Strategy
The Government is at an advanced stage in preparing a Post-Covid-19 Economic Recovery Strategy (ERS). The Economic Recovery Strategy will outline policies, programmes and projects to be implemented between 2020 and 2022 aimed at restoring the country’s path to rapid economic growth consistent with the projection in Vision 2030 and its Third Medium Term Plan 2018-2022.
It is important to note that the ERS is building on the priority policies, programmes and projects of Third MTP 2018-2022. Both the ERS and MTP III will therefore form the basis for the MTEF budgeting process going forward. The key elements and focus of this Economic Recovery Strategy include:
- Enhancing allocations to strengthen health care systems;
- Enhancing the role of the private sector in financing infrastructure projects and other development initiatives;
- Facilitating a clean, green and resilient recovery and growth strategy;
- Supporting MSMEs;
- Full and timely implementation of the Economic Stimulus Programme;
- Investment in ICT and digital infrastructure to support digital platforms to facilitate e-commerce and delivery of public services;
- Promotion of local production processes and domestic value supply chains;
- Enhancement of disaster risk management systems;
- Improvement of social protection through targeted policy interventions and programmes;
- Speedier implementation of policy, institutional and legal reforms; and
- Strengthening monitoring and evaluation system for timely and effective quality outcomes.