OPINION: Stimulus plan is needed to help Kenya bounce back from coronavirus
At the beginning of the year, a key conversation was on how the Kenyan economy would turn out in 2020.
The fears then were around poor performance of the agricultural sector, contracting, the construction industry and the government of Kenya’s untamed appetite for debt.
While this was going on locally, China had started reporting though marginally, about the outbreak of the coronavirus.
With the first quarter over, and three cases the coronavirus confirmed in Kenya, the fate of the economy is all out.
The travel and tourism industry was poised to do better this year.
With the sporadic spread of the coronavirus disease and World Health Organization declaring it a pandemic, the sector will struggle.
Speaking to one of the key players over the weekend, Friday’s announcement on the confirmed cases was the last nail on the coffin.
The announcement had been followed by cancellation of bookings for conferences.
A trip in and out the Jomo Kenyatta International Airport tells the story all too well.
A once busy airport is now reeling from cancellation and suspension of travel especially to Asia, Europe and now North America.
As global airlines take a dip cutting on operations and asking staff to take unpaid leave, local players can only watch and plan ahead.
National carrier Kenya Airways has already suspended most of its route and with the spread now gathering pace in Africa, it could cut out more of its destinations.
Closer home, the small and medium enterprises were the first to feel the hit. With China on lockdown, most of these establishments could not get supplies to restock.
This meant that they would either; ration sales, hike prices or close shop all together.
But the confirmation of the coronavirus cases in Kenya will now wipe many of them out of business completely.
The recommendation by government to ban public gatherings which is popular in Kenyan market and trading streets, customer numbers will shrink.
This will further dent a sector that has been grappling in the last few years with credit squeeze and most recently huge payment arrears from both national and county governments.
The jua kali sector, mama mboga as well as other informal sector businesses are likely to bleed as #socialdistance is enforced to keep everyone safe.
With a looming ‘lockdown’ the impact could even be worse on the entertainment industry.
Going by what is happening elsewhere in the world, the closure of pubs, restaurants, theatres as well museums will deal a blow to players and operators in the sector.
At the government level, the 2020/21 budget making cycle is likely to be disrupted.
The National Assembly- a key cog in the process- is likely to adjourn sine die (until further notice).
This means the budget-making will likely fall behind schedule bringing with it delays in implementing government projects.
Already, there are talks that a supplementary budget is highly likely to allocate funds to the government to deal with the coronavirus.
This is after the Ministry of Health indicated it needed more funds to respond to the pandemic rapidly.
With all these signs that Kenya’s economy will continue ailing, the National Treasury must urgently come up with plans to cushion the population.
A well-thought-out stimulus plan should be in the offing.
This will be the only way to help the economy bounce back.
While others may argue that this could be a tall order in an economy that is already battered, there is very little way out of it.