With bumpy ride expected due to Covid-19, all out action required

Covid-19 has irrevocably changed lives everywhere. First, the virulent pandemic spread like wildfire, sorely testing medical services and resources. How far along we are here is still an open question and we wait with bated breath.

Prevention and containment measures then barricaded millions of people into confines and strictures and subjected them to massive lifestyle changes. The layoffs have been drastic as whole segments of commercial activity get halted.

This came in tandem with an economic fallout that is challenging and undermining the foundation and structures of our economy. Exports and foreign exchange earners, such as tourism, have plummeted to near-zero, and day-to-day commercial activity has slowed to a snail’s pace.

The most vibrant activity is projections on how far economic growth will fall to this year. Each successive one tends to project lower than the last. My guesstimate is that we will be lucky to see any growth at all.

The picture is made bleaker by the impending food crisis, which is worsened by the transport constrictions due to the pandemic and also the lack of urgent action by the government — Agriculture CS Peter Munya in particular.

Put together, this three-headed hydra of Covid-19, the economic fallout and dislocation and the food crunch are going to make Kenyans experience arguably one of their worst years ever. It is, therefore, important to think through what to do post-Covid-19 and to confront any other onslaughts from food shortages head-on.

The tax measures announced so far are timid and confined to a small segment of the economy. Every government ministry and department and county government must trawl through their respective operations and come up with measures and incentives to make their services less bureaucratic and more accessible.

We should think beyond financial incentives and tax breaks. The key consideration is to facilitate increased gainful and commercial activity among our entrepreneurial players, so that the wheels of activity and commerce move again. Of course, tax breaks and waivers are important because many set-ups are quite burdened with this and everything must be considered to ease the weight.

At the same time, all aspects of government must be subject to the scalpel of waste cutting. There is enough work done to know where to cut and by how much. Now the government must have the political will to do it. Ditto for the obscene salaries of our MPs and others.

The Monetary Policy Committee of the Central Bank of Kenya should take the bold step of reducing the base rate by at least one percentage point and then review whether it needs to be repeated in a month’s time.

Banks must look beyond their loan portfolios and take into account the fact that lower lending rates and incentives will be good for the economy in the short run and their loan books in the medium term. Enhanced commercial activity is not only good for the country, but also for the banks.

Pending economic reforms must move ahead. For example, there is nothing but government holding up the revamping and privatisation of the ailing sugar companies that hang like dark, grey clouds over vast areas of Nyanza and western Kenya.

Let us see what has been done in the past and is being done to resuscitate the economies around the world and take various leaves out of the relevant books for our use.

It is not up to government. All players are obligated to chip in and partake. The engine of an economy is made up of numerous components that all play their part.

Last, and as important, the government must act fast on maize imports. To date, no proposed imports have been gazetted. Time is not on our side and maize stocks will dry up over the coming few weeks. Already, prices are edging upwards. The 14-day quarantine has extended the lead time for imports; so, we will be lucky to receive them before the end of next month.

We do not have the luxury to deliberate and fidget unnecessarily.