EU shells out Sh7.8b to prop up SMEs, vulnerable families

Tuesday, June 9th, 2020 00:00 |
Informal settlements. Photo/Courtesy

Lewis Njoka @LewisNjoka

The EU has cushioned Kenya’s small and medium enterprises (SMEs) through an additional Sh7.8 billion (€65 million) meant to strengthen the country’s countermeasures targeting health, social and economic sectors.

Meant to mobilise resources to fight the pandemic and provide working capital for SMEs, the cash  will also help cushion the most vulnerable among Kenyans with women and the elderly being the main targets.

Yesterday’s donation follows another one made on April 17, where the EU together with Sweden, Finland and Denmark, announced they were mobilising Sh211 million (€1.8 million) to enhance  water for 119,000 people living in Covid-19 hotspots in the country.

Their move will take to more than Sh215 billion the amount which Kenya has received from development partners to go towards Covid-19 since the virus reached the country in March.

Feeding the poor

Other monies include Sh107 billion from the World Bank, Sh78 billion from the IMF and Sh22 billion from the African Development Bank (AfDB) among others.

Yesterday’s donation will be channeled towards four key areas aimed at strengthening measures to prevent the spread of Covid-19 and help Kenyans at the risk of hunger.

Of the total amount, Sh3.6 billion will go towards mobilising resources for containing the spread and impact of the virus in the health, social and economic sectors and will be provided through budget support to the government.

Vulnerable families and individuals in informal settlements will receive Sh1.2 billion direct support through monthly cash transfers.

Between Sh2.4 and Sh3 billion will go towards helping SMEs access finance to provide short-term working capital and keep Kenyans in jobs.

Six hundred million shillings will go directly to Safe Trade Emergency Facility which maintains the critical supply chains for trade, ensuring food security and access to critically required medicines.

Adverse impact

“The EU stands with Kenya during this challenging period and we recognise the severe impact this crisis is having on people’s lives.

Today, through these support programmes, we are making a real difference to local communities across the country as well as in Nairobi’s informal settlements who are most affected by the outbreak, strengthening our partnership with Kenya,” said EU Ambassador to Kenya Simon Mordue.

According to Mordue, the EU will contribute more than Sh35 billion to Kenya’s response to Covid-19 whilst EU member States have already provided more than Sh3.3 billion (€30 million).

The money by the EU comes at a time when the government is making targeted interventions to lessen the intensity of Covid-19 shocks on the economy.

Last week, President Uhuru Kenyatta announced that the government had disbursed Sh5 billion to counties to deal with the pandemic and promised that a further Sh2 billion will be injected in the hotel industry to cushion them from the effects of the pandemic.

He said the government had injected more than Sh250 billion back into the economy in the form of tax refunds and a stimulus package to cushion the economy from Covid-19 shocks.

“At the outset of this pandemic, my administration injected Sh216 billion back into the economy through tax refunds, rebates and waivers.

In the second phase we have further rolled-out Sh53.7 billion under the eight-point stimulus package to reinvigorate our economy,” said Uhuru.

Uhuru spoke at Statehouse during the eighth Presidential addresses on the Coronavirus pandemic.

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