Home GENERAL NEWS Parliamentary budget office proposes Sh150bn in additional borrowing to fund COVID-19

Parliamentary budget office proposes Sh150bn in additional borrowing to fund COVID-19

by biasharadigest

NAIROBI, Kenya Apr 7 – The Parliamentary Budget Office has proposed additional borrowing of up to Sh150 billion aimed at among many things, providing social support to vulnerable populations in the wake of COVID-19 pandemic.

The virus has infected 172 and killed 6 people in the country including a six year old boy. Seven people have recovered and been discharged.

The funding, the office said, will cushion vulnerable persons, laid off workers and eligible self-employed persons who have been negatively impacted by the slowdown in economic activities as a result of the pandemic.

In March, Kenyan firms saw a much sharper decline in operating conditions,  leading to a drop in the Purchasing Manager’s Index to 37.5, the second-worst record in the survey’s history.

Of the Sh150 billion, the office proposed that Sh70 billion be allocated as social transfers to vulnerable persons, laid off workers and eligible self employed persons.

The funds will target 4 million urban households during the first phase. The ministry of Interior will lead other agencies in identifying eligible persons for the scheme.

In the report released on April 2, the budget office said that ministries and other state agencies should also cede an estimated Sh122 billion budget shortfall.

“Ministries, departments and agencies to absorb the full impact of revenue collection shortfalls amounting to by implementing expenditure cuts in all discretionary proposals to mitigate against the negative impact of covid 19 on the economy 17 areas such as travel, training and entertainment including suspending non-critical development spending,” part of the report noted.

In the proposal, Sh30 billion of Sh150 raised in consessional loans will be directed to sectors which are badly hit by the pandemic in form of payroll support and concessional interim credit facilities.

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The sectors include hotels, restaurants, and entertainment facilities, professional and support services, transport and storage, flower industry, and affected MSMEs in various sectors.

If implemented, the Big Four Agenda sectors will receive a Sh 40 billion boost which is expected to stimulate economic activities through concessional credit facilities, loan guarantees and agricultural input subsidies.

“The fiscal stimulus funds should be allocated towards protecting ongoing investments critical sectors which can help support economic activity and employment during the crisis,” the report added.

In their proposal, the Parliament office wants the government to allocate another Sh 10 billion to expand the health sectors capacity through more employments and funding of manufacturing firms to scale up medical and protective supplies.

“The resources under development budget need to be reoriented to support the production of essential medical items like ventilators and face masks this resources can be channeled to Rivatex, KIKONET factory in Kitui and the vehicle assembly industries in Thika.”

The government has already received Sh7.4 billion from the Central Bank of Kenya to support efforts of containing the spread of coronavirus in the country.

The World Bank has also given the Kenyan government more than Sh 11 billion in immediate funding to support Kenya’s response to the global COVID-19 (coronavirus) pandemic under a new operation – the Kenya COVID -19 Emergency Response Project.

Globally, the disease has killed nearly 82,000 with more than 1.2 million infections what the United Nation term as the worst crisis since the end of World War 2.

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