While the Kenyan authorities have remained in a heightened state of vigilance against Covid-19 since the first local case was recorded on March 13, private sector manufacturers have been adjusting operations to ensure supplies of much-needed medical equipment are available. As of April 7, Kenya had reported 172 cases and six deaths, out of a global tally of 1.43m cases and 82,000 fatalities. Mindful of the burden that a high number of local infections would add to the country’s health care infrastructure, the government has imposed strict quarantine and social distancing measures to limit community transmission.
A mandatory nationwide curfew is in place between 7pm and 5am, and movement in and out of Nairobi metropolitan area and three other regions is restricted until April 27.
Meanwhile, a ban on all inbound and outbound international flights to Kenya that was imposed on March 25 was extended for an additional 30 days from April 6, with the exception of cargo flights and evacuation charters for foreign nationals.
Beyond addressing the health challenges, the authorities have also taken action to mitigate the wider risks to East Africa’s largest economy.
On March 23 the Central Bank of Kenya (CBK) cut its 2020 growth forecast from 6.2% to 3.4% in light of the pandemic, citing a drop in demand from international trading partners, as well as disruption to tourism, supply chains and domestic production.
The CBK also cut its benchmark lending rate by 100 basis points, to 7.25%.
Following this, on March 25, President Uhuru Kenyatta announced a raft of measures designed to ease the impact on businesses and households.
Alongside an 80% salary cut for the president and his deputy, the measures included a reduction of value-added tax from 16% to 14%; a reduction in both income tax and corporation tax from 30% to 25%; and 100% tax relief for individuals with a monthly income of less than KSh24,000 ($225).
More than 80% of businesses in Kenya are micro-, small and medium-sized enterprises (MSMEs), and these generate around 75% of all jobs and 30% of annual GDP. Consequently, a number of the measures announced aim to support small businesses, including a reduction in the recently re-introduced turnover tax rate from 3% to 1%. Manufacturing adapts
Prior to the crisis, the government was working to expand Kenya’s manufacturing capabilities, particularly in the field of medical supplies.
These efforts have been stepped up in recent weeks, with many local manufacturers converting their operations.“Where possible, […]