PACKAGE

State to inject Sh26 billion in third stimulus package

Tea, coffee, sugar farmers among those to benefit.

In Summary

•This will bring spending in the initiative to over Sh79.9 billion, having spent about Sh53.7 billion in the first stimulus programme.

•The government is focusing on the implementation of the Economic Recovery Strategy that aims at restoring the economy to a strong growth path, CS Yatani notes. 

Treasury CS Ukur Yatani outside Pariament Building for Budget reading on June 11, 2020.
Treasury CS Ukur Yatani outside Pariament Building for Budget reading on June 11, 2020.
Image: FREDERICK OMONDI

Kenya plans to inject Sh26.2 billion into a third Economic Stimulus Package to accelerate recovery of  key sectors of the economy hit by the Covid-19 pandemic, says Treasury Cabinet Secretary Ukur Yatani.

This will bring the total stimulus package to more than Sh79.9 billion, having spent about Sh53.7 billion in the first stimulus programme launched in March last year, which was followed by a number of relief measures in the second phase.

As Treasury CS Ukur Yatani awaits sector groups' input for the 2022/23 budget by November 21, he said thatthe  new stimulus programme will target key productive and service sectors in thirteen strategic areas.

These include agriculture, health, education, drought response, policy, infrastructure, financial inclusion, energy, and environmental conservation.

These include supporting small scale tea farmers with fertiliser subsidy to a tune of Sh1 billion and safeguarding the livelihoods of farmers within the nation’s sugar belt by allocating an additional Sh1.5 billion in aid of the sugar sector.

“This will be appropriated towards factories maintenance and payment of farmer’s arrears,” states Yatani in the Draft 2022 Budget Policy Statement.

To complete the ongoing reforms in the coffee sub-sector, the government will allocate Sh1 billion to the Ministry of Agriculture to be appropriated towards this intervention.

Noting the effects of the ongoing drought situation, the government will allocate Sh1.5 billion in support of the communities in affected areas especially the Arid and Semi-arid lands (ASAL) counties.

Treasury has also announced plans to have a framework that will facilitate the reduction of the cost of animal and chicken feeds.

Shillings eight billion will on the other hand be allocated to the Ministry of Education for the CBC infrastructure expansion programme.

On health, the state plans to establish an additional 50 new Level 3 hospitals, to be situated in non-covered areas and densely populated areas across our nation, with the initiative being allocated Sh3.2 billion.

This is part of the government's efforts to enhance access to medical coverage across the country under the Universal Health Coverage programme.

Government will also allocate Sh10 billion for the third phase of the “Kazi Mtaani” programme with Yatani saying the programme covering over 200,000 youths will be rolled out to all counties, with priority given to densely populated areas.

“To cushion Kenyans against the turbulence caused by the current volatility in fuel prices, the Government will develop, a framework for stabilisation of petroleum prices by December 24, 2021,” he adds.

The government will also secure the full implementation of the report of the Presidential taskforce on review of Power Purchase Agreements that establishes a pathway for the reduction of electricity prices by 30 per cent.

“The government is focusing on the implementation of the Economic Recovery Strategy that aims at restoring the economy to a strong growth path, creating jobs and economic opportunities with a view to tackling social and income inequalities,” Yatani says in the BPS.

Treasury is accelerating the 2022/23 budget ahead of next year polls, with its reading set for March before MPs go into campaigns. 

It is expected that the successful implementation of the Economic Recovery Strategy which is also aligned to the “Big Four” Agenda will promote inclusive growth and transform the lives of Kenyans, he says.

The economy is expected to expected to rebound to 6.0 per cent after contracting by 0.3 per cent in 2020 on the effects of the pandemic to key sectors mainly services sectors including wholesale and retail trade, education, accommodation and restaurant, and transport and storage.

The rebound is pegged on the continued reopening of the services sectors, recovery in manufacturing, and stronger global demand.