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Government to assist mitigate the effects of Covid-19 for businesses

The Covid-19 pandemic has disrupted the business fraternity’s supply chain, adversely affecting the country’s exports in horticulture, flowers, textile and apparels sectors.
Industrialisation, Trade and Enterprise Development Cabinet Secretary Betty Maina said that since the outbreak of the disease in the country, the ministry has met the business community to brainstorm ways to address the disruptions.
“We have listened to their views and recommendations on interventions that the government should take to mitigate the negative effects of the pandemic on our economy. We shall continue to have our weekly consultative meetings with the small businesses and private sector,” she said.
The CS held a meeting with the Mitumba Traders Association, Kenya Private Sector Alliance, the Kenya Association of Manufacturers, Retail Traders Association of Kenya, the Kenya Flower Council, Association of Kenya Suppliers, Kenya National Chambers of Commerce and Industry among others.
Speaking during a briefing on the impact of Covid-19 on business at the Ministry’s Headquarters at NSSF building, Maina said the government has outlined a raft of measures to address the concerns of the business community.
She spelt out the contingency measures that include clearing of value added tax refunds within 30 days, settling authenticated pending bills due to small and medium enterprises within 30 days, a reduction in banks’ cash ratio to 4.2 percent, and lowering of the base rate from 8.25 percent to 7.25 percent.
“Some of the concerns raised by the business community are availability of liquidity to support businesses in the face of dwindling sales which arise from diminished production, fast-tracking of value added tax refunds, settlement of pending bills owed to Small and medium enterprises by government institutions,” said Maina..
Other concerns are reduction of the Commercial Bank of Kenya lending rate, which directly impacts on loan interest rates, reduction of cash reserve ratio, rescheduling of loan repayments, and reduction of corporation tax, and Pay as You Earn among others.
She said Kenya Bankers’ Association has also committed its membership to re-schedule loan repayment at the request of the borrower.
The CS urged Kenyans to do everything within their capacity to support the government keep the country running, and minimise the effects of the disruption.
“To back President Uhuru’s call on the measures the government has put in place to support businesses, the Industrialisation and Trade Ministry has identified several essential manufacturers and producers and their value-and distribution chains, which are essential for this purpose,” she added.
CS Maina said to cushion the business community from experiencing challenges and inconveniences caused by Coronavirus, the ministry has also set up the Business Emergency Centre to address challenges that may require quick action.
Regarding the nighttime curfew imposed by the government, Maina assured the business fraternity that it is not a shutdown nor a cessation of activities and urged them to reorganise their shifts to comply with curfew hours in line with the government’s directive.
She at the same time noted that there is need for coordinated communication and action between the national government and the counties for a response that will ensure efficiency in delivery of services to the public.
The CS said essential services must remain open to ensure people are not denied basic needs, as that would be counter-productive to the objective of the response effected.
“In this regard, we have held discussions with Governor Mohammed Kuti, representing the Council of Governors in the relevant Committee, and agreed that markets will remain open, on condition that strict sanitary and hygiene standards are observed,” she stressed.
Other measures that counties are required to adhere to include fumigation, disinfection, hand washing and use of sanitizers, as well as shortening the period of closure to allow the appropriate post-closure exposure period to pass before allowing re-entry of persons and foodstuff, observing social distancing through queue management and appropriate spacing between the various vendors,
County governments will also be required to consult the Ministry of Trade and other relevant national government agencies before implementing measures to close factories and other businesses providing essential goods and services.
“We appreciate the counties which have taken the initiative to provide alternative market space to traders and food vendors in compliance with protocols of fighting the pandemic,” said Maina.
The CS said that currently the economic activity has faced a down-turn due to the global knock-on effects on trade and travel, saying that with well managed restrictions, the country will be able to surmount the effects on the economies as a region and the continent.
She advised the business community to take advantage of the reduced government levies and fees to, improve firms’ cash flow, saying that it will help the country to quickly restore supply of goods and services.
“This will help our country to continue engaging on re-activation and stabilization of our supply chain and costs,” said Maina.
EAC partner states have reached an agreement on the logistics that will ensure continued smooth flow of trade across the transport corridors and common borders within the region.
She said the ministry was holding talks with some of the development partners such as DFID to support the business fraternity to weather the storm during these turbulent times.
“DFID in partnership with McKinsey & Company are keen to support the creation of a Situation Room that will provide real time analysis of the economic impact of COVID-19 to businesses and recommended interventions,” said the CS.
By Bernadette Khaduli

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