Kenya plans to spend Kshs 53.7 billion shillings ($503 million) on a stimulus package to support businesses that have been hit by the coronavirus pandemic, according to the National Treasury.
The so-called post-Covid-19 economic stimulus package will provide credit guarantees, loans to small businesses and help prop up tourist facilities, Treasury Secretary Ukur Yatani said in letter to parliament.
Yatani told the legislature that President Uhuru Kenyatta approved the package, and asked lawmakers to amend his earlier 2020-21 budget proposals by adding the new provisions.
East Africa’s largest economy faces a severe hit from the virus fallout after the nation was already struggling before the outbreak to boost revenue and fund development projects.
The government sees economic growth slowing to 2.5% this year compared with earlier estimates of around 6.2%.
The treasury doesn’t expect the stimulus program to affect the budget deficit, which it projects to decline to 7.3% of gross domestic product in 2020-21 from an estimated 8.2% in the year through June.
The fiscal intervention will be funded through transfers from other items in the budget, financial aid and surpluses from state-owned corporations, according to Yatani.
The government also plans to fast-track the payment of pending bills and tax refunds to companies. The stimulus package will take effect in the fiscal year starting July 1.
Other measures in the economic revival plan include temporary employment programs for young people, farm-inputs subsidies, and rehabilitation of roads, schools, and water facilities.
The government will also speed up payments of cash transfers to the elderly, disabled persons, orphans and vulnerable children.