State of the Nation: President Uhuru on the economy

The COVID-19 pandemic hit Kenya against the backdrop of a steady economic growth rate of 5.4 per cent in 2019.

President Uhuru Kenyatta said his government’s focus on implementing the Kenya Vision 2030 and its medium term plan dubbed the Big Four Agenda had been bearing fruit. As result, most of the major economic sectors evidenced impressive growth last year; including manufacturing, agriculture, tourism, and financial services.

On March 25, the President announced State interventions listed here to cushion Kenyans against the adverse economic effects of the COVID-19 pandemic.

Economic Recovery

The President urged parliament to prioritise consideration of pending seminal Bills such as the National Aviation Management Bill, which will anchor the turnaround of the national carrier, Kenya Airways.

“My Administration, with the support of Parliament, further initiated an 8-Point Economic Stimulus Programme amounting to Sh56.6 Billion,” said President Uhuru Kenyatta.

The major objective of the Economic Stimulus Programme was to return the economy to the growth trajectory it was on before the pandemic by increasing demand for local goods and services, cushioning vulnerable Kenyans, securing household food security for the poor, and creating employment.

The Stimulus Programme sought to enhance liquidity in support of the business sector, particularly micro and small enterprises and the government further set aside a Sh5 billion for the operationalising the Credit Guarantee Scheme.

President Uhuru said the Recovery Programme targets to revamp a broad spectrum of economic sectors by hiring 5,000 health workers and 11,000 interns; even as it supports teachers.

“The Recovery Programme further seeks to create 100,000 job opportunities for the youth, besides implementing a subsidized farm input scheme for vulnerable households,” said the President.

Part of the resource allocated will be channelled towards the ongoing fabrication of 250,000 school desks, crafted by local artisans.

The President said the youth have been engaged in collective action and contracted as artisans and suppliers for the Big Four Agenda.

“My Government’s objective has been to shift our young people from being ‘earners of wages’ to ‘owners of capital’. We have modelled this through engaging them in collective action,” he said.

In October 2020, President Uhuru launched a Boda Boda Scheme to cater to at least 1.4 million riders in that sector, who collectively support 5.2 million families across the country.

“These riders make a total of Sh357 billion a year, which is more than the total disbursements to the 47 counties by the National Exchequer, which presently stands at Sh316 billion annually,” noted the President.

“With these statistics in mind, it is clear that boda boda riders can come together and become owners of capital and the holders of major investments,” he continued. “We are encouraging them to engage in saving schemes and to work together in order to create a capital base that will enable them to own petrol stations, boda-boda assembly factories and other investments that will transform their lives.”

On food security, the government is in the process of implementing the Agricultural Sector Transformation and Growth Strategy and reformation of the Agricultural Inputs Subsidy Programme.

4.5 million title deeds have been issued in the last seven years, compared to six million issued from 1963 to 2013.

Ease of doing business

Kenya has seen an 80-slot improvement since 2014, ranking at 56th globally and ranking 3rd in Sub-Saharan Africa on the Ease of Doing Business Global Ranking Report, from a low of 136th globally in 2014. The country ranks first in Protecting Minority Investors and fourth Globally on Getting Credit.

To enhance the ease of doing business, President Uhuru commissioned a Transit Shed at the Kenya Railways, dedicated as the clearing point for cargo imported into the country by small traders. This is in bid to curb delays when clearing trade wares and save considerable financial cost.

The number of companies registered daily has increased by 500 per cent from 30 in 2014 to 200 in 2020, and a daily average of 300 during the COVID-19 period. “On aggregate, 400,000 companies are annually now registered in Kenya,” said the President.

Transport and infrastructure

In October, the President witnessed the signing of Africa’s largest Public-Private Partnership funded project - Nairobi-Mau-Summit Expressway.

In respect to key national trunk roads, the construction of the Nairobi Expressway Project is underway.

With regard to Ports and Bridges, the Lamu Port Berth-One is complete, and focus has shifted to bringing it into full operation for trans-shipment purposes.

“My Administration is also in the final stages of installing the Likoni Floating Bridge; an 824-metre-long bridge costing Sh1.96 billion that will be the first automated floating bridge in Kenya,” said President Uhuru.

The Likoni Floating Bridge will help to decongest ferry transport at the Likoni Channel in the context of COVID-19 safety concerns and beyond by providing alternative safe pedestrian connectivity between Liwatoni on Mombasa Island to Ras Bofu on the Likoni mainland side.

The Kisumu Port Rehabilitation works are complete, and the new port is already processing fuel products to Uganda.

On railways, President Uhuru commissioned the Nairobi Commuter Railway Upgrades, on November 10, which are set to dramatically change the public transport experience in the City and across the Metropolitan Area.

Rehabilitation of the meter gauge railway line along various routes is also underway.

The Nairobi-Nanyuki route is back in service after decades of dormancy, with the Naivasha to Kisumu route currently undergoing an overhaul under multi-agency team coordinated by the Kenya Defense Forces.

In the energy sector, the last mile connectivity programme crossed the 7.2 million household connections mark and the country is proceeding towards the aspiration of 100 per cent universal electricity access by 2022.

The roll out of the Basic Voice Infrastructure in 67 sub-locations in un-served areas has increased access to ICT infrastructure and connectivity.

To improve access to information and e-government services, My Administration has also established 135 Constituency Innovation Hubs across the Country.

Trade

Exports within the East African Community (EAC) jumped to a six-year high in 2019.

In March 2018, Kenya and Ghana were the first countries to not only sign but also ratify the landmark agreement creating the African Continental Free Trade Area. This agreement brings the 54 African nations under one common market with a population of 1.2 billion and a combined gross domestic product of more than USD3 trillion.

The government is engaging with the United Kingdom to evolve an arrangement that will guarantee us continued access to the United Kingdom Market, following its exit from the European Union.

Government is also consulting with the United States of America for a solution that will ensure Kenya’s continued access to the US market beyond 2025 when the African Growth and Opportunity Act comes to an end without the need for that pact’s further renewal.

President Uhuru Kenyatta spoke during his second-last State of the Nation address before a joint sitting of the National Assembly and Senate on the back of gripping national challenges that have recast his priorities.

The address – an annual constitutional requirement – was initially meant for the first quarter of the year but was put off by the coronavirus pandemic. Uhuru's last address was on April 4, 2019.