This archive report was first published on 24 May 2020.
On May 23, 2020, President Uhuru Kenyatta unveiled a Sh53.7 billion Eight-Point Economic Stimulus Programme to cushion families and companies affected by the Covid-19 pandemic.
According to experts, each shilling spent is likely to have a stimulating impact, and governments are playing a central role in stabilising their economies through economic stimulus packages.
However, the Sh53.7 billion stimulus package is deemed insufficient to mitigate the Covid-19 impact, considering African countries are estimated to lose more than half of their GDP growth.
For instance, Namibia's plan was at 4.25 per cent of GDP, Egypt at 1.8 per cent, Ethiopia's at 1.6 per cent, while South Africa has the biggest at 10 per cent, but only half will actually be spent.
Experts argue that a two per cent of GDP stimulus programme is around Sh200 billion, making the Sh53.7 billion unveiled by the President 0.5 per cent of GDP, which is underwhelming.
The government's plan to address the demand side of the economy is also questioned, with the President's intent to spend Sh5 billion to hire local labour and another 10 billion to engage 200,000 youths in restoring public hygiene.
However, critics argue that this cannot be equated to a response to the demand side of the economy, as it is not stemming the loss of livelihoods.
Furthermore, the government's plan to make set aside Sh3 billion for affordable credit to SMEs is deemed insufficient, considering the sector employs close to 15 million people and contributes more than 30 per cent to the national economy.
