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East Africa govts brace for vibrant 2019

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By JAMES ANYANZWA
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East African governments are optimistic about more vibrant economic growth in 2019, largely driven by increased spending on infrastructure projects and a growing domestic demand for goods and services.

But the weakening of regional currencies, declining credit to the private sector, public expenditure pressures, growing public debt, weather-related shocks and uncertainty in the global markets due to the USA’s economic and trade policies stand in the way of this rosy outlook.

According to Kenya’s National Treasury, public expenditure pressures, particularly wage-related recurrent expenditures and erratic weather pattern could impact agricultural output, energy generation and cause high inflation.

“We continue to monitor these risks and will take appropriate measures to safeguard macroeconomic stability,” said Dr Kamau Thugge, Principal Secretary in the Ministry of Finance.

According to Dr Thugge, the slowdown of credit to small and microenterprises — which are among the cogs that drive economic growth — has not been unique to Kenya.

He says the same is playing out in the other EAC big economies Tanzania and Uganda.

A report by the Institute of Chartered Accountants in England and Wales shows that the region’s economic growth is expected to ease slightly to 6.3 per cent in 2018, from 6.8 per cent in 2017, attributed to limited credit to the private sector, a challenging investment climate and poor performance of the agriculture sector due to erratic rainfall patterns.

It is argued that while infrastructure development is important to the economic development of a nation, funding for these projects is slowing, leaving regional economies facing a debt overhang, with most of the expensive loans coming from China in exchange for project contracts.

Economists at Kenya’s Institute of Economic Affairs recommend that regional governments enforce austerity measures to control expenditure, especially recurrent, and tame the rising public debt.

These measures, according to the economists, include cutting down on non-core expenditure items, streamlining the public service and enhancing efficiency in the operations of state-owned corporations to stem financial bleeding through corruption and mismanagement.

Uganda’s Ministry of Finance has also raised the alarm about the pressures on local currencies, which increase the import bill and the cost of living.

While EAC currencies depreciated in November, the Uganda shilling appreciated against the dollar by one per cent, compared with October.

The Kenyan and Tanzanian currencies fell by 1.3 per cent and 0.03 per cent respectively, while the Burundi and Rwanda Francs each depreciated by 0.4 per cent.

According to the global rating agency Moody’s Investor Service, the rising US interest rates that lead to capital outflows across emerging markets, in conjunction with increasing government debt levels and currency depreciation, could significantly harm African banks’ loan quality and access to foreign currency funding.

In Uganda, the growth in credit to the private sector has been hampered by both the increased lending rates and the banks fear of loan defaulters.

In Kenya, the controlled interest rate regime that came into force in September 2016 has seen banks reduce lending to the private sector in favour of investment in government securities.

According to the Bank of Tanzania, most of the loans extended to the private sector by Tanzanian banks are directed to personal loans to households and salaried employees.

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The National Bank of Rwanda said banks would continue curtailing credit extension by tightening their lending protocols, considering that credit risk has a direct bearing on the underperforming loans.

The EAC governments have prioritised infrastructure spending to strengthen their growth agenda.

It is estimated that the EAC countries requires $78 billion to finance mega infrastructure projects in the pipeline.

For instance, the construction of two major trans-national roads is set to take off in 2019 with funding from the African Development Bank.

The Bank’s board had approved a $322 million loan to Burundi and Tanzania to finance the Rumonge-Gitaz and Kabingo-Kasulu-Manyovu road-upgrading project.

The bank is also set to finance the construction of the Malindi-Mombasa-Lunga Lunga/Horohoro-Tanga-Bagamoyo highway.

In 2017, the EAC economies’ growth rate slowed to an average of 5.3 per cent due to the effects of drought and reduced credit to households and businesses.

Growth stood at 6.1 per cent and 5.4 per cent in 2015 and 2016 respectively.

In 2017, Kenya was the worst performer among its regional peers as its economic growth decelerated to a five-year low of an estimated 4.8 per cent in 2017.

The economies of Tanzania, Rwanda and Uganda are estimated to have grown by 6.4 per cent, 6.1 per cent, and 4 per cent respectively.

According to the African Development Bank, the agriculture sector is the main driver of East Africa’s growth, followed by industry and the minerals subsector.

All EAC countries had relatively high fiscal deficits, partly due to weak domestic resource mobilisation and high public investment spending.

Kenya, Rwanda, and Tanzania are expected to drive the region’s growth further in 2018 and 2019.

In Kenya, the total public debt hit Ksh 5.04 trillion ($50.4 billion) in June this year (2018), comprising external debt worth Ksh2.56 trillion ($25.6 billion, 51 per cent) and domestic debt worth Ksh2.48 trillion ($24.8 billion, 49 per cent).

Uganda’s public debt has been sporadically rising from as low as $1.9 billion in the 2008/2009 financial year to over $11 billion by December 2017, accounting for an estimated 38.4 per cent of the country’s gross domestic product.

In Tanzania, the public debt for the three months to September 30 increased to Tsh469.6 billion ($203 million) from Tsh373.1 billion ($162 million) in the same period last year, owing to an increased uptake of new loans and depreciation of the local currency.

According to the Bank of Tanzania, revenue collection has also been below target prompting increased borrowing from domestic and external markets to bridge the deficit.

Of the total debt external debt and domestic debt amounted to Tsh360.3 billion ($156 million) and Tsh109.3 billion ($47 million) respectively.

In February 2018 Kenya issued the second $2 billion sovereign bond to pay off its maturing debts and fund its development plans.

The bond was issued in two equal tranches of 10 years at a coupon of 7.25 per cent and 30 years at a coupon of 8.25 per cent.

In Uganda the Parliamentary Accounts Committee queried the rate at which the government was borrowing, terming it not sustainable and is putting national assets in danger of being auctioned in the event of default.

In the wider East African region, Ethiopia, which has overtaken Kenya as the region’s largest economy, maintained a strong growth of 10.3 per cent in 2017, mainly driven by the public sector’s investment in infrastructure.

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Public officers above 58 years and with pre-existing conditions told to work from home: The Standard

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Head of Public Service Joseph Kinyua. [File, Standard]
In a document from Head of Public Service, Joseph Kinyua new measure have been outlined to curb the bulging spread of covid-19. Public officers with underlying health conditions and those who are over 58 years -a group that experts have classified as most vulnerable to the virus will be required to execute their duties from home.

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However, the new rule excluded personnel in the security sector and other critical and essential services.
“All State and public officers with pre-existing medical conditions and/or aged 58 years and above serving in CSG5 (job group ‘S’) and below or their equivalents should forthwith work from home,” read the document,” read the document.
To ensure that those working from home deliver, the Public Service directs that there be clear assignments and targets tasked for the period designated and a clear reporting line to monitor and review work done.
SEE ALSO: Thinking inside the cardboard box for post-lockdown work stations
Others measures outlined in the document include the provision of personal protective equipment to staff, provision of sanitizers and access to washing facilities fitted with soap and water, temperature checks for all staff and clients entering public offices regular fumigation of office premises and vehicles and minimizing of visitors except by prior appointments.
Officers who contract the virus and come back to work after quarantine or isolation period will be required to follow specific directives such as obtaining clearance from the isolation facility certified by the designated persons indicating that the public officer is free and safe from Covid-19. The officer will also be required to stay away from duty station for a period of seven days after the date of medical certification.
“The period a public officer spends in quarantine or isolation due to Covid-19, shall be treated as sick leave and shall be subject to the Provisions of the Human Resource Policy and procedures Manual for the Public Service(May,2016),” read the document.
The service has also made discrimination and stigmatization an offence and has guaranteed those affected with the virus to receive adequate access to mental health and psychosocial supported offered by the government.
The new directives targeting the Public Services come at a time when Kenyans have increasingly shown lack of strict observance of the issued guidelines even as the number of positive Covid-19 cases skyrocket to 13,771 and leaving 238 dead as of today.
SEE ALSO: Working from home could be blessing in disguise for persons with disabilities
Principal Secretaries/ Accounting Officers will be personally responsible for effective enforcement and compliance of the current guidelines and any future directives issued to mitigate the spread of Covid-19.

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Uhuru convenes summit to review rising Covid-19 cases: The Standard

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President Uhuru Kenyatta (pictured) will on Friday, July 24, meet governors following the ballooning Covid-19 infections in recent days.
The session will among other things review the efficacy of the containment measures in place and review the impact of the phased easing of the restrictions, State House said in a statement.
This story is being updated.
SEE ALSO: Sakaja resigns from Covid-19 Senate committee, in court tomorrow

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Drastic life changes affecting mental health

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Kenya has been ranked 6th among African countries with the highest cases of depression, this has triggered anxiety by the World Health Organization (WHO), with 1.9 million people suffering from a form of mental conditions such as depression, substance abuse.

KBC Radio_KICD Timetable

Globally, one in four people is affected by mental or neurological disorders at some point in their lives, this is according to the WHO.

Currently, around 450 million people suffer from such conditions, placing mental disorders among the leading causes of ill-health and disability worldwide.

The pandemic has also been known to cause significant distress, mostly affecting the state of one’s mental well-being.

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With the spread of the COVID-19 pandemic attributed to the novel Coronavirus disease, millions have been affected globally with over 14 million infections and half a million deaths as to date. This has brought about uncertainty coupled with difficult situations, including job loss and the risk of contracting the deadly virus.

In Kenya the first Coronavirus case was reported in Nairobi by the Ministry of Health on the 12th March 2020.  It was not until the government put in place precautionary measures including a curfew and lockdown (the latter having being lifted) due to an increase in the number of infections that people began feeling its effect both economically and socially.

A study by Dr. Habil Otanga,  a Lecturer at the University of Nairobi, Department of Psychology says  that such measures can in turn lead to surge in mental related illnesses including depression, feelings of confusion, anger and fear, and even substance abuse. It also brings with it a sense of boredom, loneliness, anger, isolation and frustration. In the post-quarantine/isolation period, loss of employment due to the depressed economy and the stigma around the disease are also likely to lead to mental health problems.

The Kenya National Bureau of Statistics (KNBS) states that at least 300,000 Kenyans have lost their jobs due to the Coronavirus pandemic between the period of January and March this year.

KNBC noted that the number of employed Kenyans plunged to 17.8 million as of March from 18.1 million people as compared to last year in December. The Report states that the unemployment rate in Kenya stands at 13.7 per cent as of March this year while it stood 12.4 per cent in December 2019.

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Mama T (not her real name) is among millions of Kenyans who have been affected by containment measures put in place to curb the spread of the virus, either by losing their source of income or having to work under tough guidelines put in place by the MOH.

As young mother and an event organizer, she has found it hard to explain to her children why they cannot go to school or socialize freely with their peers as before.

“Sometimes it gets difficult as they do not understand what is happening due to their age, this at times becomes hard on me as they often think I am punishing them,”

Her contract was put on hold as no event or public gatherings can take place due to the pandemic. This has brought other challenges along with it, as she has to find means of fending for her family expenditures that including rent and food.

“I often wake up in the middle of the night with worries about my next move as the pandemic does not exhibit any signs of easing up,” she says. She adds that she has been forced to sort for manual jobs to keep her family afloat.

Ms. Mary Wahome, a Counseling Psychologist and Programs Director at ‘The Reason to Hope,’ in Karen, Nairobi says that such kind of drastic life changes have an adverse effect on one’s mental status including their family members and if not addressed early can lead to depression among other issues.

“We have had cases of people indulging in substance abuse to deal with the uncertainty and stress brought about by the pandemic, this in turn leads to dependence and also domestic abuse,”

Sam Njoroge , a waiter at a local hotel in Kiambu, has found himself indulging in substance abuse due to challenges he is facing after the hotel he was working in was closed down as it has not yet met the standards required by the MOH to open.

“My day starts at 6am where I go to a local pub, here I can get a drink for as little as Sh30, It makes me suppress the frustration I feel.” he says.

Sam is among the many who have found themselves in the same predicament and resulted to substance abuse finding ways to beat strict measures put in place by the government on the sale of alcohol so as to cope.

Mary says, situations like Sam’s are dangerous and if not addressed early can lead to serious complications, including addiction and dependency, violent behavior and also early death due to health complications.

She has, however, lauded the government for encouraging mental wellness and also launching the Psychological First Aid (PFA) guide in the wake of the virus putting emphasis on the three action principal of look, listen and link. “When we follow this it will be easy to identify an individual in distress and also offer assistance”.

Mary has urged anyone feeling the weight of the virus taking a toll on them not to hesitate but look for someone to talk to.

“You should not only seek help from a specialist but also talk to a friend, let them know what you are undergoing and how you feel, this will help ease their emotional stress and also find ways of dealing with the situation they are facing,” She added

Mary continued to stress on the need to perform frequent body exercises as a form of stress relief, reading and also taking advantage of this unfortunate COVID-19 period to engage in hobbies and talent development.

“Let people take this as an opportunity to kip fit, get in touch with one’s inner self and  also engage in   reading that would  help expand their knowledge.

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