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Find way to reopen the economy, end suffering

Tuesday June 30 2020
By EDITORIAL

Last month, President Uhuru Kenyatta announced a Sh53.7 billion package to revive the economy from the ravages of the Covid-19 pandemic.

Since late March, the country has been in partial lockdown with sectors such as aviation, public road transport, hospitality and education grounded. Travel in and out of main cities such as Nairobi and Mombasa are still prohibited.

Until a few weeks ago, most hotels and restaurants remained closed and, although the restrictions have been eased, the patronage is quite insignificant. Learning institutions and places of worship remain shut.

JOB LOSSES

The net result of all this is economic recession, which has led to collapse of companies and business, lay-offs and pay cuts, among others.

The latest report by Labour Cabinet Secretary Simon Chelugui indicates that the country had recorded more than one million job losses, which included those who had been forced into unpaid leave and were, therefore, not receiving any income.

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It is against this background that President Kenyatta sought to put in money into the economy to bail out the various players. However, there no respite in sight yet.  

Which is why we ask, what is the progress in implementing the deal? Can the government give an update of what it has done? Is the cash available for uptake? Have systems been created and processes outlined to make it possible for the various sectors to tap into the cash allocations?

Related to this is the pending bills that the government had pledged to clear, a substantial part of it lying with the county authorities. What is the status of those pending bills?

LOSSES

We revisit this matter because the situation is getting dire. As companies present their half-year results, the common denominator is loss of earnings.

Unsure of the future, several companies, including banks, media, brewers and retailers have issued profit warnings and withheld dividends.

Several are bound to retrench workers. Mass unemployment is a public risk; it leads to increased crime and other anti-social behaviour. It undermines economic recovery as incomes fall and cash in circulation dwindles.

Restarting the economy is the government’s obligation. Already, expectations are high that the government will soon relax the containment measures, such as curfew and cessation of movements across some counties.

That is for the short run. In the long run, the government has to implement economic cushions to enable businesses and individuals absorb the coronavirus shocks.

Therefore, the National Treasury and other responsible agencies have to execute the stimulus packages to enable businesses to pull out of the rut and forestall further devastation.

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