Uhuru picks economy amid new Covid threat


President Uhuru Kenyatta delivering his State of the Nation Address at Parliament buildings on November 30, 2021. PHOTO | JEFF ANGOTE | NMG

President Uhuru Kenyatta has signalled that his administration has no immediate plans to lock down the country again despite the new Covid-19 variant scare that is sweeping across the world, in a major relief to the economy ahead of the festive spending.

The President is betting on an accelerated vaccination plan in the coming months to preclude the need for further drastic Covid containment measures such as lockdowns and a night curfew that slowed down the economy last year.

“By receiving our vaccinations, we will have played our part in securing not only our own lives but in protecting the lives of those around us,” he said in his State of the Nation Address to a joint House of Parliament on Tuesday.

“That shot in the arm is our most powerful weapon against a disease that has ravaged the world. That shot in the arm of every adult Kenyan will also be a shot in the arm for our economy and our social institutions. It ensures that we can conquer put this disease and fully return to normal.”

Kenya plans to vaccinate 27.2 million adults by end of June next year and at least 10 million by Christmas this year.

The President’s State of the Nation Address on Tuesday came against the backdrop of fears he might consider imposing new restrictions in response to reports of the new Omicron coronavirus variant, which was first detected in South Africa.

Health Cabinet Secretary Mutahi Kagwe said Monday that a crisis meeting of the National Emergency Response Committee (NERC) had been called to discuss and assess new steps to contain the virus, even as more nations imposed restrictions on travel from southern Africa.

The President in his address to Parliament acknowledged that the Omicron Covid-19 variant was a cause for concern for his administration.

But unlike in many of his recent pandemic-era speeches in which he made a strong case for public health protocols to save lives, the President on Tuesday underlined a focus on revitalising and shielding the recovering economy from Covid shocks.

“During the second quarter of 2021, real GDP recorded a phenomenal 10.1 percent growth. This is the highest growth ever recorded in one quarter in Kenya’s history. It is also the first time Kenya has hit double-digit growth. The last time Kenya’s economy got close to this kind of performance was in 2010 during the Grand Coalition Government when the economy hit an 8.4 percent growth rate,” said Mr Kenyatta.

“My administration has secured an impressive economic acceleration, including doubling our GDP from Sh4.74 trillion to Sh11 trillion.”

To boost vaccination efforts, Kenya will next year start manufacturing Covid-19 vaccines locally in collaboration in a move aimed at easing supply hitches that have derailed mass inoculation, said President Kenyatta.

He said the country has started the process of building a filling plant for the Covid-19 vaccines ahead of a full-fledged vaccine manufacturing plant.

“As the first step towards this goal, we have established the Kenya Biovax Limited as a venture that would locally produce anti-Covid-19 vaccines,” said Mr Kenyatta.

“I, therefore, directed the Ministry of Health to operationalise the company to ‘form and fill’ and eventual manufacture of our locally produced vaccine by Easter of 2022.”

The country lifted a nationwide curfew in October this year that had been in place since March 2020 to curb the spread of the coronavirus.

Many of those measures have since been eased. Mr Kenyatta said making a decision between lives and livelihoods presented his administration with an impossible choice.

“One side of the divide presented an economic argument. They wanted us to leave the country ‘open’ and save the economy. They argued that Covid was a health crisis that should not trump economic imperatives,” he said.

“The other side of the divide made a compelling health argument against the economic argument. Led by a brain trust of medical scientists and researchers, they argued that the country had no option but to lockdown…After much reflection, my administration opted for the public health argument over the economic argument.”

He used Tuesday’s address to mostly outline his legacy projects, including improvements in infrastructure such as new roads and highways, and a new port.

President Kenyatta who now has a narrow window to push through policy priorities on the economy ahead of the end of his term in August next year said his administration had built 10,500 kilometres of roads, connected more households to electricity, supported devolution, improved access to health and education and enhanced the capacity of security agencies.

“We have also made Big Push Investments that have spurred development, revived dead capital, and boosted entrepreneurship. We have also restored dignity to our people through water and sanitation, healthcare, education, and security reforms,” he said.

Analysts say Mr Kenyatta has roughly a few months to implement his policies before the country turns its attention to the 2022 elections and accelerate the subsequent “lame duck” status that defines presidents who are not running for office again.

The impact of the pandemic on key sectors such as tourism saw economic output contract for the first time in nearly three decades last year.

The Covid knocks saw growth slide to negative 0.3 percent last year from 5.0 percent in 2019.

This period ushered in layoffs and pay cuts as firms grappled with flagging sales due to the restrictions.

The proportion of adults fully vaccinated now stands at 9.8 percent, with 2.65 million people fully vaccinated.

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