This archive report was first published on 13 June 2020.
Kenya's economy is facing unprecedented challenges, including the COVID-19 pandemic, locust invasion, and floods. To address these issues, Finance Cabinet Secretary Ukur Yatani presented a Ksh2.79 trillion ($27.9 billion) budget for the 2020/2021 fiscal year on June 11.
The budget aims to revive almost every sector of the economy and create 1.7 million jobs lost in three months. The government has revised the country's growth prospects for 2020 to 2.5 per cent from 6.1 per cent compared to last year's growth of 5.4 per cent.
Mr Yatani proposed an Economic Stimulus Programme worth Ksh56.6 billion ($566 million) to boost economic activity, provide livelihoods, and enable businesses to recover from the adverse effects of COVID-19. The programme includes a Ksh3 billion ($30 million) seed capital to operationalise a credit guarantee scheme for micro-, small- and medium-sized Enterprises (MSMSEs) and address the issue of youth unemployment through a Ksh10 billion ($100 million) Kazi Mtaani Programme.
The government will also focus on building a robust network of high-quality roads, railways, and ports with an allocation of Ksh172.4 billion ($1.72 billion). Additionally, Ksh497.7 billion ($4.97 billion) will be used to support the education system by building additional classrooms in secondary schools and recruiting 10,000 intern teachers to support 100 per cent transition in schools.
Other key interventions include fast-tracking payment of outstanding verified value-added tax refund claims and pending bills owed to businesses, allocating Ksh10 billion ($100 million) to improve the cash flow of businesses. The health sector has been prioritised with an allocation of Ksh111.7 billion ($1.11 billion) to support overstretched facilities and equip hospitals and medical staff.
