This archive report was first published on 28 June 2020.
On May 22, 2020, President Uhuru Kenyatta launched the 8-Point Economic Stimulus Programme, a Sh53 billion mechanism aimed at stimulating growth and development in Kenya's economy. The programme was launched in response to the Covid-19 pandemic, which President Kenyatta described as both a health and economic crisis.
However, the economic stimulus package was not a new solution to Kenya's economic woes. By September 2019, businesses were already struggling with basic issues such as rent and emoluments for workers. The 2020 Economic Survey revealed that gross domestic product growth had slowed down to 5.4 per cent in 2019, down from 6.3 per cent in 2018. This decline in economic growth was felt by ordinary Kenyans, who were already experiencing economic hardship.
President Kenyatta argued that the economic stimulus package would put more money in the hands of families, giving them the power to make economic choices in their local spaces. However, the question remains as to what informed the identification of the focus sectors and the proportions of the Sh53 billion to be shared across the sectors. Additionally, the extent to which these chosen sectors and the money allocated to them will actually stimulate growth is uncertain.
For a stimulus package to be effective, it needs to be timely, temporary, and targeted. The 8-Point Economic Stimulus Programme appears to meet the first two criteria, but its effectiveness will depend on how well it is administered. A targeted approach is crucial to ensure that resources go to those who need them most and will spend them effectively.
Ultimately, the success of the economic stimulus package will depend on its proper administration. If implemented effectively, it has the potential to stimulate growth and development in Kenya's economy.
