NAIROBI, March 24 (Reuters) - Kenya’s government plans to pay pending bills to suppliers and quickly process tax refunds for firms to support the economy in the face of the coronavirus crisis, its finance minister said.
The East African country has 16 confirmed cases of COVID-19 and the disease is impacting the crucial tourism and farm exports industries.
Ukur Yatani told Reuters late on Monday that the government expected revenue collection to be hit as both imports and domestic consumption slowed.
“We are looking at underperformance, as a result of just COVID-19, of about 70 billion (shillings) ...in terms of revenue for the remaining three months (of this financial year),” he said, adding that situation was evolving fast.
Yatani said the government would shift planned spending towards urgent development projects.
It plans to release 49 billion shillings ($460 million) to suppliers for the unpaid bills, and expedite the payment of close to 10 billion shillings in value added tax refunds to businesses in the next two-three months, he said.
The World Bank is making $60 million available to Kenya’s health sector to help it deal with the outbreak.
President Uhuru Kenyatta, who has been meetings business executives, said on Monday that fiscal stimulus measures would be will be announced later this week.
Kenya’s central bank has already implemented stimulus measures, cutting interest rates by a heftier than expected 100 basis points on Monday and reducing the amount of cash that banks are required to hold as reserves.
It is also letting borrowers restructure loans if they enter into difficulties due to the outbreak.
Yatani said the government and firms were seeking new sources of raw materials imports to keep industries going during the crisis.
“We already have challenges with the inflow of (materials) inputs... inputs are either delayed or are not moving in as required,” he said.
$1 = 106.6000 Kenyan shillings editing by John Stonestreet