President Uhuru Kenyatta’s administration has put together a Sh929.5 billion war chest to respond to the effects of Covid-19 pandemic.
In its Post Covid-19 Economic Recovery Strategy 2020-2022 report, the Treasury said the money would be used to help reboot the economy by investing in areas that would enable businesses to thrive and create jobs. The amount is separate to the Sh2.7 trillion budget set for the current financial year.
The new funds will direct money towards social protection, particularly to vulnerable groups like orphans, and the elderly, healthcare and transport.
Education will play a big role in the two-year stimulus plan, with funds going towards free primary and day secondary learning, hiring of more teachers, the purchase of desks, upgrading ICT and internet connectivity in all 5,000 universities, and boosting loans for higher education.
The government will provide most of these funds, with the Treasury expecting to collect more taxes through high net worth individuals, digital platforms and lifting current exemptions, which it expects to reel in Sh500 billion.
It will also find new avenues for borrowing, for instance through green and infrastructure bonds, and restructure existing debt to preserve some funds. The State has further agreed with pension funds and insurance companies to defer the payment of interest, which would save up to Sh73 billion, and plans to conclude public-private partnership projects worth Sh200 billion.
Fledgeling State corporations will be merged, civil servants will start paying pensions and most procurement will go digital in an effort to boost the financing of the stimulus package.
“The ERS (economic recovery strategy) will be implemented over the next two years, and by the end of the period, the economy is expected to assume a growth trajectory,” reads part of the report, with the goal being to get GDP to 5.9 per cent.