2021 is promising, economic growth projected at 7.0 %- Yatani

The pandemic is expected to increase poverty by almost 2.5 million people.

In Summary

• Treasury CS Yatani said that Economic Stimulus Programme (ESP) helped the country to sustain economic activities, providing incomes to people and businesses.

• Yatani said that the growth outlook in 2021 and the medium term will be supported by a stable macroeconomic environment.

Treasury CS Ukur Yatani during Budget Reading on June 11, 2020.
Treasury CS Ukur Yatani during Budget Reading on June 11, 2020.
Image: FREDERICK OMONDI

Treasury CS Ukur Yatani has expressed his optimism for the year 2021 despite the ravage caused by coronavirus which has not spared the country’s economy.

The CS was making his intervention during the Human Capital Project Ministerial conclave on Monday, where the theme was ‘investing in human capital for a green, resilient and inclusive recovery.’

Yatani said that domestically, Kenya’s growth is projected at around 7.0 per cent in 2021 reflecting the reopening of the economy and the lower base of 2020 after the impact of the pandemic.

The CS was responding to a question directed to Kenya, on how the government is using its Covid-19 Economic Recovery Strategy to invest in human capital to spur an inclusive, sustainable recovery.

He said that the growth outlook in 2021 and the medium term will be supported by a stable macroeconomic environment, ongoing investments in strategic priorities of the Government under the “Big Four Agenda”.

 Yatani acknowledged that the Covid-19 pandemic has disrupted economic development and as such, the government took measures to minimise the adverse impact of the pandemic on people and businesses.

“At the start of the pandemic, the Government moved fast and implemented bold measures. We provided tax reliefs (tax cuts) to businesses and people and rolled out various monetary and social policy measures (cash transfers, VAT refunds, and payment of pending bills) to mitigate the effects of the COVID 19 Pandemic,” Yatani said.

He added that the government rolled out the Economic Stimulus Programme (ESP) that helped to sustain economic activities, provided incomes to people and businesses, and supported the vulnerable and the new urban vulnerable.

The CS added that the pandemic is expected to increase poverty in 2020 by almost 6 percentage points (or an additional 2.5 million people) through serious impacts on livelihoods, by sharp decreases in incomes and employment.

According to the CS, the new poor are more urban-based, with a higher level of education, and are usually working in the service sector – rather than the agricultural – sector.

“With the reopening of the economy and lifting of mobility restrictions in late 2020, the labor market started to show promising signs of recovery.”

He added that through the Post Covid-19 Economic Recovery Strategy, the government has identified critical areas of interventions.