Financing COVID-19 Vaccination in Kenya: Cost Simulation Analysis
Macroeconomic indicators reveal underperformance of the economy which was occasioned by the adverse impact of COVID-19 pandemic and the ensuing containment measures adopted in March 2020. The contraction was spread across all sectors of the economy but was more dismal in accommodation and food services activities, education, and transport sectors. The overall performance of the economy in 2020 was cushioned from a deeper slump by accelerated growths in agricultural production (4.8 percent), mining and quarrying (6.7 percent), construction activities (11.8 percent) and health services (6.7 percent). It is notable that most of the emerging markets and developing economies such as Kenya are projected to experience a more challenging recovery from the pandemic compared to their counterparts. This is largely on account of uneven access to COVID-19 vaccine which is therefore likely to impact negatively on the full resumption of economic activities in these economies. Additionally, the rapid spread of delta and the threat of new variants have increased uncertainty about how quickly the pandemic can be overcome. In light of this, the government is implementing the economic recovery strategy and other priority programmes as outlined in the Third Medium Term Plan of Vision 2030, with the objective of returning the economy to the pre COVID-19 growth trajectory by increasing demand for local goods and services, cushioning vulnerable Kenyans, securing household food security for the poor, and creating employment and incomes. While the government through the Budget Policy Statement (BPS) recognizes the risk of emergence of new variants of COVID-19, the budgetary commitments towards mitigation of these risks are inadequate. The actual allocation in FY 2021/22 to facilitate further roll-out of vaccines to create herd immunity, was proposed to be Ksh 14.3 billion. We anticipate that more resources prioritized for enhanced Covid-19 vaccination roll out will boost economic activities towards attainment of the projected economic growth rate of 6% in 2021 and 5.8% in 2022.