Treasury to spend Sh26b on easing pain caused by Covid-19

Kenya plans to spend Sh26.6 billion to boost post-Covid-19 recovery in the next financial year with the biggest chunk directed at businesses.

This is part of the government’s Economic Stimulus Plan (ESP) in the 2021-2022 financial year that starts in July, a recently released budget summary by the National Treasury shows.

“The government is implementing the stimulus plan that targets to support businesses and enhance economic activities through labour-based activities,” said Treasury. 

Sh8.6 billion, the biggest chunk of the Sh26.6 billion spending plan, will go towards enhancing the liquidity of businesses.

The pandemic has since last year devastated businesses and millions of livelihoods with the hardest-hit sectors being tourism and the hospitality industry.

Over 1.7 million workers are estimated to have lost jobs when partial lockdown measures were imposed to contain the spread of Covid-19.

Sh6.4 billion will go towards improving the education sector. School children lost nearly one academic year owing to the pandemic and this allocation is meant to ensure they achieve learning targets. 

Sh7.4 billion will be spent on improving the environment, water, and sanitation facilities.

This will go to ongoing projects on rehabilitation of wells, water pans, and underground tanks in Arid and Semi-Arid Areas (ASALs).

The project will be moved from the State Department for Regional and Northern Corridor Development to the Ministry of Water, Sanitation, and Irrigation.

This sees Sh530 million for the project allocated to the Ministry of Water. “This was to enhance efficiency in resource utilisation and remove duplication of projects by many agencies,” said Treasury.

Sh1.97 billion will go towards improving agriculture and food security while Sh1.2 billion will be spent on the recruitment of health interns.

The smallest chunk of the ESP at Sh1 billion will go to the Kenya Wildlife Services for engaging community scouts.

Treasury is expected to spend Sh3.63 trillion in the new financial year.

Treasury noted that to propel the economic recovery, the government would implement interventions under the post-Covid-19 Economic Recovery Strategy which seeks to “re-position the economy on a steady and sustainable growth trajectory,”

“The strategy is aimed to accelerate growth, employment creation, and poverty reduction,” said Treasury.

The ESP and the Post-Covid-19 Economic Recovery Strategy will be funded through local borrowing.

Kenya plans to borrow Sh1.63 trillion to finance the budget from both local and external creditors to plug the deficit with the government expected to collect Sh2 trillion in taxes.  

wwambu@standardmedia.co.ke