The government needs to introduce more inclusive measures to counter the effects of the coronavirus pandemic, a new report proposes.
A survey by Deloitte, dubbed 'Economic Impact of the Covid-19 pandemic on East African Economies', shows the state needs to "provide a bridge to get the private sector to the other side of the pandemic in reasonable shape".
While the government has introduced a number of measures to mitigate the impact of coronavirus, a revenue shortfall for the 2019/20 financial may prove this an uphill task.
According to the report, revenue collection for the remaining months in the current fiscal year is expected to drop Sh69.84 billion.
However, the state has received Sh79.3 billion approved by the International Monetary Fund (IMF) as part of the Rapid Credit Facility (RCF) to help fight effects of the pandemic.
In addition, the government also received Sh5.3billion from the World Bank and Sh7.4 billion from the Central Bank to help navigate through the Covid-19 storm.
This, in addition to numerous contributions made by local firms towards the Covid-19 Emergency Response Fund, can have a significant impact on the country's economy, according to the report.
"This will depend on how the funds are spent and on whether the government is able to implement additional, more inclusive measures to counter the effects of Covid-19," the report stated.
Key sectors of the economy have been negatively impacted by the spread of the virus including tourism, manufacturing, construction and real estate, trade and agriculture.
Deloitte estimates export revenue alone is expected to drop Sh159.21 billion this year.
The majority of this will be from the flower sector, which is losing approximately Sh250 million per day with the total value of losses in the sector estimated at Sh60 billion by the end of the year.
"Kenya’s flower exports have so far recorded a more than 50 per cent drop in exports with indications that production is currently at less than 10 per cent and facing the risk of total collapse," the report said.
This has left approximately 30,000 temporary workers without jobs and another 40,000 permanent staff sent on unpaid leave.
The report further adds that leisure and conference tourism, both external and domestic face possible collapse owing to travel restrictions across the globe.
Stunted tourist arrivals are set to reduce the consumption of various goods and services and the incomes of workers in related sectors.
"Tourism and travel contribute about 1.6 million jobs (8.5 per cent of total employment). Most of these jobs are at risk due to closure of hotels and shut-down of global aviation," the report stated.
The government has so far set aside Sh500 million to help the tourism sector recover post the coronavirus pandemic.
The World Bank estimates more than 500,000 workers stand to lose their jobs over the next six months due to the spread of coronavirus.
