KWINGA: Stimulus package will steer Kenya back to economic recovery

Monday June 01 2020

President Uhuru Kenyatta recently announced that the government plans to release an additional Sh 53 billion in stimulus aid for our country.

According to the National Treasury, the funds will be cushion businesses from the effects of Covid-19 pandemic, besides supporting education and healthcare sectors. This is of not the first stimulus package instituted by the government since the onset of this global pandemic.


However, these recent measures are particularly important as we begin considering the steps needed to ensure our economy gets back on track.

Though government stimulus packages always sound good, they are risky and can create a significant economic burden on society for years to come if not well planned.

These often result in higher taxes on corporations and citizens or significant inflation and economic stagnation if the government simply prints the required additional money.


With careful planning by the Treasury, the proposed plan will not create any increase our national deficit.

According to the Treasury CS Ukur Yatani, the package “will be funded through budget realignment, donor aid, and mopping up surpluses from parastatals. 

The President has been working to clean up government ministries and organisations to make them more efficient considering that funding comes from tax payers.


Many in government are unhappy with the plan to reallocate billions of shillings from their coffers to improve the lives of Kenyans.

The stimulus package is expected to have far reaching effects on the economy. Government plans indicate that the funds will cushion over 100,000 unemployed youths from the effects of Covid-19 by enabling them to gain meaningful employment.

One such example is education, where the government plans to facilitate the the making of 250,000 desks. Additionally, 10,000 teachers will be hired be hired. This will be in addition to the hiring of 1,000 ICT instructors to support digital learning.

The private sector, and in particular industries of critical importance will similarly benefit. In the agriculture sector, farmers, especially flower growers will get approximately Sh3 billion to cushion them from the effects of Covid-19. Without government support, many industries may collapse. 

The government will continue to reduce debt to GDP ratio from 9.1 per cent of GDP at its height in 2016 to half that amount. This budget will also be premised on the understanding that citizens will require significant tax breaks next year as a result of the Covid-19 crisis.

And while it is easy to hand out government funds in order to garner public support, politics is not a popularity contest.

Wrongly instituted fiscal or monetary policy can throw an economy into a tailspin that lasts years.

Mr Kwinga is a political [email protected]