• Despite some resulting increase in economic activities, a huge numbers of working people will remain without their regular incomes.
• The economy needs urgent surgery, a proper plan for revival, a big demand side push
On March 12, President Uhuru Kenyatta announced extension of curfew for the next 60 days.
Despite some resulting increase in economic activities, a huge numbers of working people will remain without their regular incomes. The economy needs urgent surgery, a proper plan for revival, a big demand side push, a big push to government expenditure are the needs of the hour. Will the government act in time?
It has taken several measures to revive the economy. It is expected that the economy will return to high growth trajectory post Covid-19.
Pre-Covid, Kenya’s growth was largely positive on the strength of domestic absorption, while economy was registering a steady pace of economic growth. Moreover, macroeconomic parameters such as inflation, fiscal deficit and current account balance exhibited distinct signs of improvement.
However, while the curfew has massively disrupted economic activities, allowing the pandemic to get out of control would come at an astronomical cost in every sense.
Let’s keep the country priorities clear: When a person dies, they’re gone; nothing can resurrect them but when Kenya economy is dead, we shall recover it. Equally, when a company dies, its staff, plant, skills and knowledge are put to good use by others. So, we must do everything in our power to stop people dying from Covid-19. So far, the only proven way we have of stopping the virus from spreading is social distancing, wearing mask and washing hands.
It’s true the economy is in a slowdown is beyond doubt. GDP growth rate has declined for two consecutive financial years. The first prerequisite for a revival is a boost in spending, especially on consumer durables.
Polices adopted in many countries around the world include transfers, credit guarantee funds, interest rate subventions, liquidity and refinance facilities, loan extension and forbearance, tax relief, deferrals and regulatory easing. Many of these expire over time, and pay for themselves as they revive growth.