Kenya bets on Covid jabs to reverse Sh560b GDP loss
Lewis Njoka @LewisNjoka
Kenya is banking on the rollout of Covid-19 vaccine to reverse the Sh560 billion gross domestic product (GDP) loss the country suffered in 2020 due to the pandemic shocks.
On March 5, Kenya began its vaccination exercise with the Oxford-AstraZeneca jab administered to top health officials led by Acting Director General of Health, Patrick Amoth.
The country will vaccinate people in three phases 15.8 million people, 30 per cent of total population of 49 million, by the end of June 2023 to help revive the country’s battered tourism-dependent economy.
The first phase, targetting 1.25 million people will run between March and June this year, while Phase II will run between July this year and June next year.
Last week, President Uhuru Kenyatta said Kenya’s economy last year grew at 0.6 per cent instead of the projected 6.2 per cent due to the Covid-19 containment measures instituted beginning March when the virus arrived in the country. This translates to Sh560 billion loss of GDP.
Uhuru, however, defended the decision, saying had the measures averted the loss of 2,000 lives daily and a million Covid-19 infections by Christmas 2020. This even as the third wave of the pandemic starts to bite.
Failure to put the measures in place, according to the President, would have seen the economy, which is projected to grow by seven percent this year, contract by 15 per cent instead.
Head of Research at Genghis Capital Churchill Ogutu said while there already has been a gradual rebound in the economy, uptake of the vaccine will give people the much needed confidence, to go back to their normal lives thus reinvigorating business.
He said sectors which rely on external demand, such as tourism and travel, stood to benefit greatly from the rollout of the vaccination both exercise locally and abroad.
He, however, warned that it could take a while before the effect on economy became visible considering that many people may not have disposable income at the moment and that the uptake of vaccine was still wanting.
“As vaccination in source destinations rises it will have a positive knock-on effect on tourism. They will have the confidence to start travelling again,” Ogutu said.
“For sectors that rely on external demand like tourism it could take a while because right now even in some of these source destinations there has been lacklustre approach to the vaccine,” he added.
Ogutu’s views were echoed by Samuel Nyandemo, a senior economics lecturer at the University of Nairobi who said the jab would have a positive psychological effect on the recipients enabling them go about their businesses more confidently.
He, however, lamented failure by top political leaders to take the vaccination, saying it would affect negatively confidence in the jab among common citizens.
“From the psychological point of it, people will be calm knowing that they are now protected. That will help many to settle down and focus on serious economic activity,” Nyandemo said.
Between 2015 and 2019, Kenya’s GDP growth rate was above five per cent except in 2017 when it grew at 4.8 per cent.
The arrival of Covid-19 pandemic in March 2020, however, saw the GDP growth rate dip to 0.6 per cent.