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Coast tourism stakeholders shy away from economic stimulus fund

The Tourism Finance Corporation has lamented at the low uptake of the tourism recovery stimulus fund among tourism players in the Coast region.

            Managing Director, Jonah Erumoi says although the tourism players had made applications amounting to about Sh.1.5 billion out of the Sh1.8 billion allocated to the region, only Sh. 300 million had been absorbed as most applicants failed to comply with requirements.

“The performance of Coast region, which was allocated a ring-fenced amount of Sh. 1.8 billion was low as we only received applications for only Sh. 1.5 billion, out of which we have disbursed Sh. 300 million,” he said.

Speaking in Malindi after a series of stakeholder engagements in the region Wednesday, Mr. Erumoi said most applicants had challenges in terms of wrong purposes, considering that the fund was meant for refurbishment to ensure the beach products fit the competitiveness of the market.

He said the government will dispatch a team to the region to help the stakeholders from the five counties to be able to absorb the remaining Sh1.5 billion before the end of January 2021.

So far, stakeholders in Mombasa county have made applications amounting to Sh. 942 million, followed by Kilifi county at Sh. 317 million, while Kwale and Taita Taveta had applications worth Sh. 214 million and Sh. 52 million respectively. Lamu and Tana River have not submitted a single application.

”The biggest challenge has been on documentation and people applying for the wrong purposes. Instead of refurbishment they were asking us to buy off or sell off their loans among other non-priority expenditures,” he said.

He encouraged hotel and tourism establishment proprietors to apply for the loan that attracts only five percent per annum payable for 10 years after a grace period of one year. Single establishments are eligible for Sh. 50 million, while a hotel chain can get as much as Sh. 200 million.

            Reports indicated that license requirements from the Tourism Regulatory Authority (TRA) and the Kenya Revenue Authority (KRA) were among the handicaps to the low fund uptake, as some of the establishments did not have necessary documents from the bodies, an indication that they could be operating illegally.

The government established a Sh. 3 billion recovery package for tourism stakeholders to use to refurbish their establishments, following the economic downturn occasioned by the Covid-19 pandemic early last year.

A report from the economic stimulus programme on the refurbishment and economic stimulus package indicated that Coast had been allocated Sh. 1.8 billion, while the rest of the country shall get Sh. 1.2 billion.

The chairperson of the Kenya Association of Hotel Keepers and Caterers in the North Coast region, Ms. Maureen Awuor, conceded that many tourism establishments were not operating lawfully, thus contributing to the low uptake of the fund as they lack documentation.

            Awuor urged all stakeholders to ensure they comply, so as to get the necessary help required from the government.

Kilifi County CEC Member for Tourism and Trade, Nahida Mohamed said it was sad that there were very few applications in the county and Coast at large despite the fact that President Uhuru Kenyatta had given priority.

”As a county government we are ready to help the investors get the necessary licenses to enable them to be compliant and hence eligible for the funds,” she said.


By Emmanuel Masha 

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