The Cabinet Secretary in the Ministry of Labour Simon Chelugui wants part of the Sh257 billion loan from the International Monetary Fund (IMF) to cushion workers involuntarily squeezed out of employment through a monthly stipend.
Cabinet Secretary told the National Assembly’s Labour Committee that they are negotiating with the Treasury on the amount to be disbursed to the ministry to cushion workers who lost their jobs in the five counties as a result of the lockdown.
The State seeks to offer a monthly stipend during periods of mass job cuts to ease the pain of loss of income and put money in people’s pockets.
Kenya the last month introduced a wave of new curbs, which restricted travel in five counties including Nairobi, a stricter curfew and the closure of bars as Covid-19 infections hit record levels.
The restrictions have raised fears of a second wave of job losses and pay cuts across sectors in an economy that dipped into recession in the thirds quarter of last year at the height of the Covid-19 crisis.
“This money is coming to the national basket treasury, we are making a case for our ministry to be considered in terms of funding,” Mr Chelugui told the lawmakers in a virtual meeting.
“I may not be able to state how much because our team is still working on the numbers and we will be able to make a case to the Ministry of Finance on exactly how much we will need to be able to cushion the people affected in the five lockdown counties and by extension those other counties that are connected to the five counties.”
The CS regretted that several workers who were active and earning a living in their various workplaces are now redundant as a result of the lockdown, warning that such people could easily turn to crime to make ends meet.
“The first thing is to identify those people and offer them some safety nets or mitigation measures and then deal with the larger economic problem,” said Me Chelugui.
The IMF on April 2 said its board had approved new three-year financing arrangements for Kenya valued at $2.34 billion to help the country continue responding to the Covid-19 pandemic and address its debt vulnerabilities.
For nearly two years, Kenya has abandoned expensive commercial debt to cut back on ballooning repayments, while revenue collection has been squeezed by the pandemic.
“The ministry is on top of things in the sense that as we get information on those that have lost employment, we are putting together those numbers and giving the same information to treasury and the funding will come to us. We don’t have as a ministry money that is just sitting to be used for cushioning the workers,” Labour PS Peter Tum also told the committee
The Treasury earlier revealed in its post-Covid-19 recovery blueprint that it intended to create an unemployment insurance fund to give short-term relief to workers who lost their jobs or are unable to work due to illness.