Kenyan Government and Private Sector Response to COVID-19

On Monday, May 11, 2020, Corporate Council on Africa hosted a webinar featuring Ambassador David Gacheru, Deputy Chief of Mission of the Embassy of the Republic of Kenya to the United States of America and Ms. Carole Karuga, CEO of Kenya Private Sector Alliance on the impact of COVID-19 in Kenya, the government’s response to tackling the pandemic, and the economic outlook as they work to mitigate the economic shock. The discussion was moderated by Florie Liser, President and CEO of Corporate Council on Africa.In his opening remarks, Ambassador Gacheru provided some updates on embassy functions during stay at home orders. The Kenyan embassy in Washington, D.C. is providing emergency services during this time. With global supply chain disruptions, and the overwhelming demand for personal protective equipment and testing kits in the UnitedStates and Europe, there were serious concerns about getting enough PPEs and testing kits to Kenya and the rest of Africa. However, working with its embassy in Washington, DC, the Kenyan government was able to do so.Kenya has reached the surveillance stage of managing this pandemic across the country. The government is now conducting targeted testing, they have done more than 30,000 tests in two weeks up from 1,000 daily. The Kenyan government will continue to scale up its testing capacity.Ambassador Gacheru commended the U.S. Center for Disease Control for its support on the ground. He felt confident that the country would have a better understanding of where it stands in a month as the country was not experiencing as much acuity of the disease as in Europe. The government has followed the World Health Organization's guidelines to manage COVID-19, social distancing and curfew measures have been put in place, closure of public gatherings and schools, and a 14-day quarantine for travelers. Some areas where there is a high concentration of the disease in Nairobi and Mombasa have been in complete lockdown for containment purposes.Ms. Karuga focused her remarks on the work KEPSA had done with the government to ensure business continuity. KEPSA is the private sector apex and umbrella body which brings together business community in a single voice to engage and influence public policy for an enabling business environment in Kenya. Its current membership includes business membership organizations and corporate members which accounts for more than 500,000 direct and indirect members. Ms. Karuga mentioned that even before the first case of COVID-19 was confirmed in Kenya, KEPSA conducted a survey to understand the extent to which the pandemic had affected its members’ supply chain, the first impact it would have if cases were confirmed in country, and the kind of support businesses would need for business continuity. KEPSA held a series of consultations with the governments to address the concerns raised by its members.The main concern recognized by both the private and public sector was the issue of job losses. The government is doing its part through cash support, deferral of taxes and levies to support the private sector. More specifically, the National Treasury has reduced the Income Tax Rate from 30% to 25%, the Resident Income Tax (Corporation Tax) from 30% to 25%; the turnover tax rate from the current 3% to 1% for all Micro, Small and Medium Enterprises (MSMEs). The Value Added Tax reduced from 16% to 14%. Additionally, one billion Kenya shillings from the Universal Health Coverage kitty has been appropriated strictly towards the recruitment of additional health workers to support in the management of the spread of COVID-19. The government is also working with local manufacturers to reconfigure their facilities to locally produce PPEs and other COVID-19 related products.The Kenyan private sector, together with government, has set up a committee to fundraise. To date, the committee has raised about $200 million. The government is also handling debt relief in a collective effort with the other member countries of the African Union. The African Development Bank has provided $10 billion to its member states in COVID-19 relief, including $1.5 billion earmarked for private sector support. The U.S. Center for Disease Control committed about $6 million towards Kenya’s COVID-19 Preparedness and Responses.Unfortunately, issues have compounded with floods as it is the rainy season in Kenya at the moment. As it is, there are more casualties of floods in Kenya than there are of the pandemic. There are more than 200 deaths due to floods and 32 due to COVID-19.Both speakers concluded the discussion by challenging CCA members to use the gaps identified due to the pandemic to leverage their expertise and leadership in specific areas and create a marketplace for their products and solutions.In her closing remarks, Florie Liser mentioned the desire for continued engagement with both the business community and government of Kenya and is looking forward to engaging on how CCA and KEPSA can help move the US-Kenya trade and investment relationship forward. Ms. Liser encouraged the U.S. and African private sector to continue to support African governments to battle COVID-19 and to help economic recovery on the continent.Captions:Photo 1: Ambassador David Gacheru, Deputy Chief of Mission of the Embassy of the Republic of Kenya to the United States of AmericaPhoto 2: Ms. Carole Karuga, CEO of Kenya Private Sector Alliance