President Kenyatta’s Six Booster Shots to Revive Kenyan Economy

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President Uhuru Kenyatta on Tuesday outlined six key areas that he will lay focus on in 2020 to improve the lives of Kenyans.

The country’s gross domestic product growth is projected to grow at between 5.7 percent and 6.0 percent in 2020, which is slightly higher than 5.6 percent projected in 2019.

However, the President noted that politics all the time has affected development in the country. “The primary thrust of that strategy is economic. I want the economy to be a more important focus than politics,” he said.

“Political power pursued its own sake will not make us the great nation we want to become. We must, therefore, use politics to shift the economy and address the plight of the most vulnerable members of our society.  We must use politics to better the livelihoods of Kenyans. If we use politics as a means to a greater end, we will give politics meaning,” he added.

His focus would on increasing money in the pocket of the farmer, building a robust Micro, Small and Medium Enterprises, supporting producers and makers of the entertainment industry.

“I want you to hold me accountable for delivering these intentions, and I want every leader in the country, at every level, to stand and work to make the lives of our people better and more hopeful,” he affirmed.

“This framework, outlined in Executive Order No 1, 2019, provides a structured “One-Government Approach” to the implementation of national government programmes; and is intended to enhance efficiency, speed of delivery, and reduce wastage and leakage of public resources.”

Increase circulation of money in the economy

The president said about 70 percent of pending bills owed by national and county government and verified as payable, had been paid by 31st December.

Further, the National Treasury reported having released Ksh 14.50 billion to suppliers in the week. Analysts from NCBA said this had a ripple effect on the liquidity. 

“This confluence saw the overnight rate ease to 4.36% from 5.22% a week earlier. The central bank mopped up Ksh 30 billion in excess liquidity from the market,” said the Analysts in their weekly income fixed report on Tuesday.

“The sound liquidity standing amidst, slow recovery in private sector lending, saw cash-rich, yield-seeking banks flock back to T-bills. From last week’s T-bill auction, the central bank raised Ksh 39.68 billion having received Ksh 42.80 billion in bids. Notably, 93% of the bids were for the one-year paper reflecting the continued search for yield,” they added.

Further, the president said the planned Ksh 150 billion infrastructure bond will lead to all infrastructure-related bills being settled ‘early this year and aid the completion of all ongoing road and infrastructure projects across our homeland’.

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Removal of the interest rate cap

“The removal of the interest rate cap in November last year will facilitate the availability of more credit to businesses which will, in turn, increase the circulation of money,” added the President.

As a result, he urged the Central Bank of Kenya to use all its tools to prevent predatory lending to boost affordable credit, especially to small and medium enterprises.

“Removing Constraints to the Growth of Micro, Small and Medium Enterprises (MSMEs). MSMEs are the lifeblood of our economy.”

The MSME sector accounts for more than 80 percent of all businesses in Kenya, create around 75 percent of the jobs and are key contributors to broad-based and inclusive economic growth.

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Agriculture Sector

Tea

“I have an intention in 2020 to increase the money in the pocket of the farmer. This will be achieved by directing our anti-corruption efforts against those managing the agricultural sector and exploiting their positions for illegal gain and trading in the conflict of interest.”

He called for the restructuring of the governance and marketing systems of the Kenya Tea Development Authority to deliver more revenue to farmers.

“I further direct the Ministry of Agriculture to immediately explore the option of KTDA paying farmers no less than 50% of their deliveries as monthly payments with the balance being paid as annual bonus.”

Dairy sector

As part of the President’s intent to the milk farmers, he directed Treasury to release Sh 500 million to New KCC to purchase excess milk from farmers to convert it into powder milk for future use.

He also directed the National Treasury to impose 16 percent VAT on milk products that have originated from outside the East African Community as a way of protecting milk producers from illegal imports.

The president further directed Treasury to release KSh660 million to the Kenya National Trading Corporation to purchase all the excess rice from Kano Plains and Mwea for onward selling to our disciplined forces, prisons services as well as our boarding schools.

Coffee Sector

The National Treasury was told to immediately operationalize the Ksh 3 billion Cherry Revolving Fund within the next 30 days to cushion farmers from delayed payments, and enable them to access finances to meet their daily cash flow requirements whilst awaiting payments for their produce.

Entertainment Industry

The president directed the ministry of ICT to work with all stakeholders to resolve the legacy issues that have plagued rights holders for decades.

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Natural disasters

The president said his government has mobilised funds and made available Ksh 5.2 billion to provide relief food supplies, undertake a resettlement programme for the displaced communities, support reconstruction of homes that have been destroyed, address health concerns and reconstruct critical infrastructure, including water supplies.

He acknowledged that the unusually heavy rains that hit the country late last year, resulted in heavy flooding and landslides, which in turn caused at least 40 fatalities, displacement of families, loss of livestock and health risks.

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Corruption

The president reiterated that he will not relent in the war against graft and called upon the judiciary to complete the convictions on persons charged.

“Now the Judiciary should give us convictions as an indication that we are winning in this war.  And to that extent, I think it is a shame on our country that we prosecuted a case against drug traffickers and we could not get a conviction and within a year of them being arraigned in the United States they have been jailed for no less than 25 years.   That is something that our Judiciary must come to terms with.”

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Political

The President gave support to the Building Bridges Initiative saying, “It is time for a new consensus. We are doing it through the BBI process. In this process of renegotiation, no voice will be wrong and all will be heard. The BBI process is inclusive, it should spell the end of ethnic majoritarianism.”