Uhuru’s plan to rescue economy

National Treasury CS Ukur Yatani. Treasury is mulling a mini-budget that may see deep spending cuts for ministries and departments as coronavirus hits the economy. [PICTURE COURTESY]

National Treasury may present a mini-budget to address the impact of the deadly coronavirus.

This may involve deep state expenditure cuts as the country faces a revenue shock following reduced business activities in key economic sectors.

The radical measures are expected to feature in a rescue plan that will be announced today by President Uhuru Kenyatta. National Treasury CS Ukur Yatani, who was cagey in revealing the rescue plan to be handed to the President, however admitted that the current government finances remain below expectations, and that his ministry might be forced to make some adjustments.

“We have come up with a proposal together with other five ministries and key State departments on how to withstand the impact of this crisis which the President will unveil,” said Yatani. The Cabinet secretary said in case of a dip in revenue, then they might have to adjust spending.

“More importantly we have come up with proposals on how to withstand adverse effects,” added Yatani.

President Uhuru Kenyatta is expected to give the detailed rescue designed to stabilise the economy amid the coronavirus pandemic that has slowed down the business environment.

According to Yatani, the Head of State will also lay bare the impact of the pandemic, which has so far gutted a number of key economic sectors, such as tourism, horticulture, aviation and trade that have already seen their numbers dip.

The plan was prepared by five ministries and key State agencies and departments, which are at the heart of the country’s economic and financial well-being.

“We have looked at all this, what the situation is and how our fiscal position might have been affected,” said Yatani. Besides National Treasury, other ministries involved in the emergency measures are the Ministry of Trade, Tourism, ICT and Labour.

The departments include the Kenya Revenue Authority, Kenya Institute for Public Policy Research and Analysis (Kippra), Kenya Bureau of Statistics and Central Bank of Kenya (CBK).

This comes at a time when the business community has called for broader measures from the government to help stimulate an economy that is slowly shutting down. Players in the private sector have pushed for a stimulus package and tax cuts, noting that the economy risked a negative growth.

CS Yatani, however, did not rule out a mini-budget that could see possible drastic cuts in government spending to address the looming devastating effects of the coronavirus. But the Treasury’s joint rescue plan, the CS said, will require the approval of the President before it is unveiled to Kenyans who expect more interventions to mitigate the lockdown that has harmed their daily lives.

The Treasury outline to be handed to Uhuru will provide a basis for the government technocrats to work from in unprecedented government response. This is likely to be broadened to include additional emergency that Yatani said would help cushion the business community and ordinary Kenyans against the overwhelming effects of coronavirus.