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Kenya’s low-income households, consisting of families living below the poverty line, are among the most affected groups in the country mainly due to the imposed curfews and decline in business activities.
As a result a suggestion by investment firm Cytonn has suggested that the country set aside approximately Sh 55.6Billion, or 0.6% per cent of Kenya’s GDP towards a “Lifeline Fund”.
“We have assumed the 0.6%, which a conservative approach having considered the government’s fiscal constraints. One of the ways this has been done e.g. in the United states, is through the distribution of funds to affected households through direct payouts to their households, through checks based on the number of people in a house hold and the level of income,” it said.
While, this might be impractical in the Kenyan context but we believe households can be cushioned through other ways such as: (i) zero-rating tax on essential supplies such as foodstuffs, for example: maize flour, cooking fat and rice, and, medical supplies such as masks, gloves, and sanitizers, and, (ii) reducing the taxes and levies charged on utilities such as electricity and water which are considered necessities, which would help citizens, especially those who might not benefit from the proposed income tax reliefs due to the nature of their wage earnings.
According to the Kenya National Bureau of Statistics, low-income households represents 27.4% of the country’s population.
This also includes laid-off workers and self-employed persons in the informal sector (e.g. barbers and hairdressers), who due to their hand-to-mouth lifestyle, will be left at a disadvantage. This relates most to families in Nairobi’s crowded and informal settlements where social distancing and working from home is not practical.