Covid-19 and Social Protection: A case of Kenya

Written by Damaris Muhika

The current Covid-19 situation has demonstrated the importance of increasing investments towards universal social protection. Social protection systems, both contributory and tax-financed benefits such as social assistance, have played an important role during the current crisis by facilitating access to
affordable health services and guaranteeing income security to workers and other vulnerable groups. Past responses to disasters and the current Covid-19 interventions in Africa have exposed critical gaps in the existing social protection systems and the need to accelerate implementation of minimum standards as prescribed by the ILO Convention 102 and Recommendation 202. The Disruption caused by Covid-19 in Kenya has resulted in social-economic deterioration which is manifested in form of food insecurity, anxiety, gender-based violence and general destitution.

The constitution of Kenya which was inaugurated in 2010 declared social protection as a fundamental right in line with the 2030 Agenda for sustainable development. Indeed Article 43 states that the ‘State shall provide appropriate social security to persons, who are unable to support themselves and their
dependents’. Kenya’s social protection system consists of three pillars namely; social security, social health insurance and social assistance.

Social security is in form of contributory programmes through NSSF (mandatory), Civil Service Pension Scheme (for teachers and disciplined forces) and occupational schemes sponsored by individual employers. With a working population of 18.1 million in both formal and informal employment, only 6.9
million workers are contributing for retirement in 1300 pension schemes, including 3.9 million in NSSF. This implies that only 28% of workers and mainly from the formal economy are assured of a pension.

Social health insurance on the other hand is mainly administered through NHIF (mandatory) complemented by Private Health Schemes and Community Based Health Financing Schemes. Only about 20% of Kenya’s population is covered by some form of health insurance with NHIF being the principal health insurance scheme for Kenyans. Currently, NHIF has seven million members (50 percent from the informal economy) hence a coverage of about 25 million beneficiaries.

Although the NSSF Act and NHIF Act provides for inclusion of the informal economy workers through voluntary contributions, enrolment has been slow leaving the target exposed to shocks such as Covid-19. The major challenge facing informal economy workers’ contribution into both social security and
health insurance is low due to irregular incomes.

The Social Assistance component which is administered through the Social Protection Secretariat facilitates cash transfer of KES. 2000 per month to four target groups; older persons of 65+ living in poverty and a universal pension coverage for 70+, orphans and vulnerable Children, persons with severe disabilities and a hunger safety net for vulnerable persons in four Arid Counties of Turkana, Mandera, Wajir and Marsabit. However, cash transfer program coverage is very minimal in the context of Kenya’s high dependency rate (81%) owing to a large number of unemployed youth and a significant size of the elderly who retire without any pension.

In addition, selected counties have evidenced that devolved units have the capacity to initiate complementary social protection programs. For instance, Makueni County has improved community livelihood by supporting value addition to locally produced fruits while Kakamega has successfully rolled
out the ‘Oparanya care’ programme to support expectant mothers and infants for medical service and nutrition. To counter the impact of Covid-19, the counties have to established measures such as acquisition of critical health equipment, employment of more healthcare workers and distribution of
relief aid to affected households.

For Kenya to mitigate vulnerability caused by shocks such as Covid-19, there is need to introduce measures to cushion the working age population from income loss. An immediate priority is the establishment of an unemployment relief fund targeting workers who have been laid off or are on unpaid leave. Trade unions and informal economy associations have existing structures to identify beneficiaries, who would receive cash transfers from the Kenya Covid-19 Emergency Response Fund that is mobilizing finances from development partners and private sector. In the long-term, a contributory unemployment insurance fund is required to support income replacement for workers,
who lose jobs to redundancy and any other cause like a pandemic. However, such drastic interventions call for inclusion of trade unions and employers into the policy dialogue for buy-in and enhanced implementation.

Secondly, there is need for a horizontal expansion of social protection programmes to increase coverage to excluded groups especially the informal economy workers. For instance, contributory social protection schemes such as NSSF and NHIF need to adopt the use of innovative delivery models such as Mpesa to penetrate the hard to reach groups especially the informal economy workers. In the long-term, targeted cash transfer programmes to the elderly, vulnerable children and persons with disabilities ought to be graduated into tax-financed universal coverage schemes.

The current Covid -19 interventions, which include weekly stipends to the urban poor, require proper coordination by incorporating all key actors and strengthening existing labour management information system including the single registry to ease identification of vulnerable populations, eradicate double
dipping and duplication while reducing the administration costs too.

Covid-19 und Sozialstaat: Der Fall Kenia

Geschrieben von: Damaris Muhika

Die aktuelle Covid-19-Situation hat gezeigt, wie wichtig es ist, die Investitionen in die universelle soziale Absicherung zu erhöhen. Die Sozialschutzsysteme, sowohl beitrags- als auch steuerfinanzierte Leistungen wie die Sozialhilfe, haben während der aktuellen Krise eine wichtige Rolle gespielt, indem sie den Zugang zu erschwinglichen Gesundheitsdiensten erleichtern und Arbeitnehmern und anderen gefährdeten Gruppen Einkommenssicherheit garantieren. Frühere Reaktionen auf Katastrophen und die aktuellen Covid-19-Interventionen in Afrika haben kritische Lücken in den bestehenden Sozialschutzsystemen und die Notwendigkeit aufgezeigt, die Umsetzung
von Mindeststandards, wie sie im ILO-Übereinkommen 102 und in der Empfehlung 202 vorgeschrieben sind, zu beschleunigen. Die durch Covid-19 verursachten sozialen Verwerfungen in Kenia haben zu einer sozioökonomischen Verschlechterung geführt, die sich in Form von Ernährungsunsicherheit, Angst, geschlechtsspezifischer Gewalt und allgemeiner Not manifestiert.

In der 2010 verabschiedeten Verfassung Kenias wurde der soziale Schutz zu einem Grundrecht erklärt, das mit der Agenda für nachhaltige Entwicklung bis 2030 im Einklang steht. In der Tat heißt es in Artikel 43: “Der Staat sorgt für angemessene soziale Sicherheit für Personen, die nicht in der Lage sind, für ihren eigenen Lebensunterhalt und den ihrer Angehörigen aufzukommen”. Das
kenianische Sozialschutzsystem besteht aus drei Säulen: soziale Sicherheit, Krankenversicherung und Sozialhilfe.

Die soziale Sicherheit erfolgt in Form von beitragspflichtigen Programmen durch das NSSF (obligatorisch), das Rentensystem für den öffentlichen Dienst (für Lehrer und öffentlich Angestellte) und durch betriebliche Vorsorgesysteme, die von einzelnen Arbeitgebern finanziert werden. Bei
einer Erwerbsbevölkerung von 18,1 Millionen Menschen, die sowohl formell als auch informell beschäftigt sind, leisten nur 6.9 Millionen Arbeitnehmer Beiträge für das Rentensystemen, darunter 3.9 Millionen im NSSF. Dies bedeutet, dass nur 28% der Arbeitnehmer und hauptsächlich aus der
formellen Wirtschaft in die Rentenkasse einzahlen.

Die Krankenversicherung hingegen wird hauptsächlich über den NHIF verwaltet, der durch private Gesundheitssysteme und gemeindebasierte Gesundheitsfinanzierungssysteme ergänzt wird. Nur etwa 20% der kenianischen Bevölkerung sind in irgendeiner Form krankenversichert, wobei der NHIF das wichtigste Krankenversicherungssystem für Kenianer ist. Gegenwärtig hat der NHIF sieben Millionen Mitglieder (50 Prozent aus der informellen Wirtschaft), was einer Abdeckung von etwa 25 Millionen Versichertern entspricht.

Obwohl das NSSF-Gesetz und das NHIF-Gesetz die Einbeziehung der Beschäftigten in der informellen Wirtschaft durch freiwillige Beiträge vorsehen, hat sich die Einschreibung nur langsam vollzogen, so dass die Zielgruppe Schocks wie Covid-19 ausgesetzt ist. Die größte Herausforderung für die Beiträge der Beschäftigten der informellen Wirtschaft sowohl zur Sozialversicherung als auch zur Krankenversicherung liegt in den unregelmäßigen Einkommenszahlungen.

Die Sozialhilfekomponente, die über das Sekretariat für Sozialschutz verwaltet wird, erleichtert den Geldtransfer von KES. 2000 pro Monat an vier Zielgruppen: ältere Menschen über 65 Jahre, die in Armut leben, eine universelle Rentenversicherung für Menschen über 70 Jahre, Waisen und
gefährdete Kinder, Menschen mit schweren Behinderungen und ein Sicherheitsnetz gegen Hunger für gefährdete Personen in den vier Trockengebieten Turkana, Mandera, Wajir und Marsabit. Angesichts der hohen Rate der Beschäftigten im informellen Sektor (81%), die auf die große Zahl
arbeitsloser Jugendlicher und eine beträchtliche Zahl älterer Menschen zurückzuführen ist, die ohne Rente in den Ruhestand gehen, ist die Abdeckung durch das Geldtransferprogramm jedoch sehr

Jedoch konnten ausgewählte Bezirke nachgewiesen, dass die dezentralen Einheiten in der Lage sind, ergänzende Sozialschutzprogramme zu initiieren. So hat beispielsweise der Bezirk Makueni die Lebensgrundlagen der Gemeinden verbessert, indem er die Wertschöpfung bei lokal produzierten Früchten unterstützt hat, während Kakamega das “Oparanya care”-Programm zur Unterstützung werdender Mütter und Kleinkinder in Bezug auf medizinische Versorgung und Ernährung erfolgreich eingeführt hat. Um den Auswirkungen von Covid-19 entgegenzuwirken, müssen die Bezirke Maßnahmen wie den Erwerb kritischer Gesundheitsausrüstung, die Beschäftigung von mehr medizinischem Personal und die Verteilung von Hilfsgütern an die betroffenen Haushalte einführen.

Damit Kenia die durch Covid-19 verursachten Schocks abmildern kann, müssen Maßnahmen ergriffen werden, um die Bevölkerung im erwerbsfähigen Alter vor Einkommensverlusten zu schützen. Eine unmittelbare Priorität ist die Einrichtung eines Hilfsfonds für Arbeitslose, die entlassen wurden oder unbezahlten Urlaub nehmen. Gewerkschaften und Vereinigungen der
informellen Wirtschaft verfügen zudem über bestehende Strukturen zur Ermittlung der Begünstigten, die Geldtransfers aus dem kenianischen Covid-19-Nothilfefonds erhalten würden, der Finanzmittel von Entwicklungspartnern und dem privaten Sektor mobilisiert. Langfristig und damit auch nach Covid-19 ist ein beitragspflichtiger Arbeitslosenversicherungsfonds erforderlich, um den
Einkommensersatz für Arbeitnehmer zu unterstützen, die aufgrund von Entlassungen oder anderen Ursachen wie einer Pandemie ihren Arbeitsplatz verlieren. Solche drastischen Interventionen erfordern jedoch die Einbeziehung von Gewerkschaften und Arbeitgebern in den politischen Dialog, um Einfluss auf die Sozialpolitik umzusetzen und Reformen anzustoßen.

Zweitens ist eine horizontale Ausweitung der Sozialschutzprogramme erforderlich, um die Abdeckung ausgegrenzter Gruppen, insbesondere der Beschäftigten der informellen Wirtschaft, zuerhöhen. So müssen z.B. beitragspflichtige Sozialschutzsysteme wie NSSF und NHIF den Einsatz
innovativer Bereitstellungsmodelle wie Mpesa übernehmen, um die schwer zugänglichen Gruppen, insbesondere die Beschäftigten der informellen Wirtschaft, zu erreichen. Langfristig sollten gezielte Geldtransferprogramme für ältere Menschen, gefährdete Kinder und Menschen mit Behinderungen mit Hilfe von universell steuerfinanzierten Umschichtungsmodellen finanziert werden.

Die derzeitigen Covid-19-Interventionen, wie die augenblicklichen wöchentlichen Cash-Transfers für die arme städtische Bevölkerung, erfordern eine angemessene Koordinierung durch die Einbeziehung aller wichtigen Akteure und die Stärkung des bestehenden Informationssystems für das Arbeitsmanagement, einschließlich des einheitlichen Registers, um die Identifizierung gefährdeter Bevölkerungsgruppen zu erleichtern, Doppelarbeit und Doppelarbeit zu vermeiden und gleichzeitig auch die Verwaltungskosten zu senken.


By Hellen Mwongeli

On March 11, 2020, the World Health Organization (WHO) declared the novel corona virus (COVID – 19) outbreak a pandemic due to its spread to over 184 countries. This pandemic has affected people globally, forcing states to take action to combat it. To this end, governments have put in place a number of measures, which often require the force of law. This article analyses legislation regarding COVID-19 in Uganda.

Uganda is a landlocked country in East Africa with population of around 45 million.[1] The country reported its first confirmed case of COVID-19 on 22nd March 2020.[2] The number of confirmed cases as at 15th May is 160, with 63 recoveries and no deaths.[3] Discussed below are directives and pieces of legislation enacted to combat the pandemic.


  1. Ban on Public Gatherings

The President banned gatherings of more than 5 people, including weddings; church, burials and Jumat services. He also ordered a closure of schools including universities. Banks, hospitals, supermarkets and markets were exempt from this ban, but the President directed them to adhere to hygiene measures; provide hand sanitizers to their employees and patrons. Public gatherings have been shown to be responsible for the spike in new infections of COVID-19. An example is South Korea, whose Patient 31 attended a church service and infected many people, resulting in a great increase in infections in the country. Therefore, Uganda is learning from the occurrences in other countries and is acting accordingly to flatten the curve.  

Travel Restrictions

On 26th March, the President banned public transport for 14 days and subsequently banned the travel of all private vehicles to prevent the crowding that he stated takes place in vehicles. Motorcycle (bodaboda) operators were only allowed to operate until 2pm. In cases of unavoidable health emergencies, people could seek a permit from the Resident District Commissioner (RDC) to travel using private means. However, this did not accommodate people who have no access to private means of travel but may also suffer health emergencies. Further, some of the RDC offices are reported as being closed when people go to seek permits.[4] The President then directed that visibly pregnant women would be allowed to travel without permits. This is a move in the right direction to reduce child and mother mortality rates for lack of access to life saving treatment. The President has stated that the current restrictions in place are under review with the intention of easing them.  

Closure of Non-Essential Services

The President ordered a shutdown of government services, except for the army, police, health services and essential services. Shopping malls and arcades, which sell non-food items would be closed for 14 days. Supermarkets could therefore operate, but with a limited number of customers at a time, and their trolleys would also have to be disinfected. In the open air markets that sell food, an area of four squared metres would have to be observed as space between vendors, who would have to spend 14 days in the market.

Lockdown and Food Relief

On 30th March, the President announced a 14 day lockdown, which has been extended twice by the time of writing. This is to prevent the spread of the virus. The government provided relief food to the urban poor since they cannot work at this time. Unfortunately, the food has not been enough and the government has been urged to facilitate access to food donations from well-wishers at this difficult time instead of banning them altogether. [5]


The Public Health Act empowers the Minister of Health of Uganda to declare – by statutory order – a notifiable disease[6] and to make regulations. The regulations are all subsidiary legislation formulated by the Minister, Dr. Jane Ruth Aceng, passed by Parliament and assented to by the President. These powers allow the country to take decisive and quick action to control the spread of a notifiable disease.

The Public Health (Notification of COVID–19) Order, 2020

On 17th March, 2020, vide this order, the Minister declared COVID–19 a notifiable disease. With this Order, the Minster is empowered to make rules as to the duties of certain persons once a notifiable disease has been declared,[7] and activates certain sections of the Act. This Order is important because it activated the machinery of the Public Health Act to deal with COVID-19. It also shows that the government is taking the pandemic seriously.

The Public Health (Control of COVID-19) Rules, 2020,

The Rules were promulgated and commenced on 24th March, 2020. They provide for the protocol to be followed once a person is suspected of having the virus, empowers medical officers to order people to self-isolate and also gives them the power to disinfect premises. The rules provide for the disposal of bodies of those who succumb to COVID-19 as per the directions of the medical officers, similar to the Presidential directive on the disposal of bodies. There is a loophole in that the rights of the families of the deceased to be involved in burying their loved ones are not recognized.

The Public Health (Prevention of COVID-19) (Requirements and Conditions of Entry into Uganda) Order, 2020

The Order obliges medical officers, who are predefined, to test any person arriving in the country for COVID-19 and hold them in isolation or quarantine as the situation requires. Prevention is core, with particular focus on curbing the spread of the disease; especially from those travelling from high risk countries to Uganda.

The Public Health (Prohibition of Entry into Uganda) Order, 2020

These rules effectively legislate the closure of the borders of Uganda, save for entry by United Nations organizations personnel and cargo from such organizations. This is a more effective approach to limiting the possibility of the spread of COVID-19 from persons travelling to Uganda from other countries compared to the approach in the above order. The exemption for UN organizations personnel and cargo indicates that the country welcomes assistance in fighting COVID-19. Given that these persons are coming into the country, the previous order on their testing and possible isolation or quarantine still applies. Therefore, the two orders are not inconsistent with each other.

Uganda’s COVID-19 infections are relatively low and no COVID-related deaths have been recorded in the country. This indicates that some of the country’s efforts such as the lock-down have been of great help in preventing the spread of the disease. The Presidential directives and legislation have been key to these efforts. However, the deaths and suffering caused by the inability to access emergency medical treatment at this time reflect poorly on Uganda.


In order to ensure the C0vid-19 infections don’t rise and citizens don’t suffer or die from the aforementioned issues; the government should ensure that the people in need get adequate and nutritious food at this time, that their rights are not violated, and that they receive emergency medical treatment when they need it.

[1] ‘Uganda Population (2020) – Worldometer’ (, 2020) <; accessed 8 April 2020.

[2] Daily Monitor, ‘Coronavirus Cases in Uganda rise to 63’ (Daily Nation, 2020) <; accessed 23 April 2020.

[3] ‘Coronavirus – COVID-19’ (, 2020) <; accessed 15 May 2020.

[4] Sally Hayden, ‘Children, Women Casualties of Uganda’s Coronavirus Transport Ban’ (, 2020) <; accessed 25 April 2020.

[5] Leonard Mukooli, ‘Did Government Get It Wrong On Covid-19 Relief Food?’ (Daily Monitor, 2020) <; accessed 25 April 2020.

[6] Public Health Act, 1935, Chapter 281 Laws of Uganda.

[7] Public Health (Notification of COVID–19) Order, 2020


Geschrieben von Joan Atim

Wir leben in beispiellosen Zeiten, in denen die COVID-19-Pandemie weiterhin weltweit hohe und steigende gesundheitliche und soziale Kosten für die Menschen verursacht. Durch den Schutz von Menschenleben und der Überlastung der Gesundheitssysteme hatte die Gesundheitskrise bereits sehr schwerwiegende Auswirkungen auf die Wirtschaftstätigkeit, da die Ansteckung eine Isolierung und weitestgehenden Lock-Down der Wirtschaftstätigkeit erforderlich machte, um die Ausbreitung des Virus zu verlangsamen. Infolgedessen geht der IWF davon aus, dass die Weltwirtschaft im Jahr 2020 voraussichtlich um 3% schrumpfen wird, viel schlimmer als während der Finanzkrise 2008-2009. Unter Verwendung eines Basisszenarios geht man davon aus, dass die Pandemie in der zweiten Hälfte des Jahres 2020 abklingt und die Eindämmungseffekte durch politische Unterstützung allmählich rückgängig gemacht werden können. Aufgrund der Neuinfektionsraten in Kenia zwischen dem 3. und 6. Mai 2020 erscheint dies jedoch unwahrscheinlich.

Die Regierung hat zwar Maßnahmen ergriffen, doch beschränken sich diese Maßnahmen auf den formellen Sektor, sodass der informelle Sektor vergessen wird, in dem ein großer Prozentsatz der arbeitenden Bevölkerung in Kenia beschäftigt ist: 83,6% der Gesamtbeschäftigung und 762,1 Tausend neue Arbeitsplätze im Jahr 2018, so das kenianische Statistikamt. Dr. Jacob Omolo (Wirtschaftswissenschaftler an der Kenyatta University) bezeichnet den Sektor als Waisenkind der Politik und stellt fest, dass die Arbeitnehmer im informellen Sektor am stärksten von den Lock-Down Maßnahmen betroffen sind. Es ist jedoch wichtig, die recht dynamischen Aktivitäten des informellen Sektors genau zu beobachten. Dahinter verbergen sich soziale Beziehungen und Verbände, die von Menschen gebildet werden, die größtenteils selbst als Händler, Hersteller und Kleinbauern tätig sind. Ihre Interaktionen sind vertrauensbasierte, persönliche Beziehungen und Transaktionen in gegenseitiger Abhängigkeit. Diese sozialen Beziehungen und Vereinigungen erfüllen vielfältige Aufgaben und Funktionen, wie das Ansprechen grundlegender Anliegen, die Regulierung des Verhaltens der Mitglieder, die Koordinierung von Märkten, Produktion, Konsum, Verteilung, Schutz und Transformation. Jüngste Maßnahmen des ostafrikanischen Regionalblocks haben dies jedoch beeinträchtigt, wie Dr. Omolo argumentiert: “Die Schließung der Grenzen, insbesondere durch Kenias Handelspartner in der ostafrikanischen Gemeinschaft und die Reisebeschränkungen innerhalb des Landes haben zu Unterbrechungen in den Versorgungsketten des Sektors geführt, indem sie die Produktion, die Vermarktung und den Vertrieb von Gütern und Dienstleistungen eingeschränkt haben und als Konsequenz haben Arbeiter und Betreiber des informellen Sektors Beschäftigung und Einkommen verloren”.

Darüber hinaus ist es möglich, dass die Senkung der Umsatzsteuer (die jetzt jeden Monat nur noch zu einem Satz von 1% der früheren 3% zu entrichten ist) sowie der präsumptiven Steuer (eine Vorauszahlung der Steuer, die von einer Person, die eine Geschäftsgenehmigung oder Handelslizenz bei der Bezirksregierung erwirbt oder erneuert, die in Höhe von 15% der Gebühr für die Geschäftsgenehmigung oder Lizenz gezahlt wird) dem Sektor nicht zu Gute kommt. Die Steuersenkungen sind für kleine Unternehmen bestimmt, deren Bruttoumsatz die Obergrenze von 5 Millionen KES nicht übersteigt oder voraussichtlich nicht übersteigen wird. Die kenianische Steuerbehörde (Kenya Revenue Authority – KRA) gibt an, dass alle Kenianer nun ihren gerechten Anteil an den Steuersenkungen erhalten werden. Dies ist möglicherweise nicht der Fall, da die präsumtive Steuer im Jahr 2019 eingeführt wurde, um die Umsatzsteuer abzuschaffen, nachdem die KRA zugegeben hatte, dass sie nicht funktionierte, aber beide Steuern sind jetzt im Steuergesetz für 2020 enthalten, dem der Präsident soeben zugestimmt hat. Es wird argumentiert, dass mit der Einführung der präsumtiven Steuer, der Umsatzsteuer und der steuerlichen Bildung die KRA zuversichtlich ist, dass sich die Besteuerungslandschaft des informellen Sektors endgültig verändern wird. Diese Veränderungen erfassen jedoch in keiner Weise den informellen Sektor, da die Umsatzsteuer die kleinen Unternehmen völlig ignorieren würde, da keine Klahrheit über den Status von Unternehmen mit einem Umsatz unterhalb der vorgeschriebenen Grenze besteht; (unter die die meisten Unternehmen im informellen Sektor zu fallen scheinen). Was die vom Präsidenten in seiner Rede vom 25. März 2020 angekündigten Steuersenkungen anbelangt, so gehen die spezifischen fiskalischen Interventionen, die darauf abzielen, die Kaufkraft von Einzelpersonen und die Cashflows für Unternehmen zu erhöhen, und die Steuergesetze in ihrer geänderten Fassung laut KPMG über die COVID-19-Interventionen hinaus, da drastische Änderungen des Systems der Steueranreize und -Befreiungen die Steuersenkungen lediglich verwässern. Professor Attiya Waris (Direktor für Forschung und Unternehmen an der Universität Nairobi) hingegen präsentiert sehr interessante Daten und zeigt den Prozentsatz der registrierten Steuerzahler in einigen afrikanischen Ländern einschließlich Kenia anhand der Anzahl der registrierten Wähler, d.h. nur 39% der 19,6 Millionen registrierten Wähler sind registrierte Steuerzahler (Einzelpersonen und Unternehmen – keine Datenaggregation). Der Grund dafür ist, dass es eine hohe Arbeitslosigkeit und eine höhere Wahrscheinlichkeit zu geben scheint, dass viele der nicht registrierten Steuerzahler im informellen Sektor tätig sind, andere sind Studenten oder Gefangene.

Trotz des oben Gesagten hat sich der informelle Sektor aufgrund der Realität, die er erfasst, für viele politische Entscheidungsträger_innen, Aktivist_innen und Forscher_innen weiterhin als nützliches Konzept erwiesen. Wir müssen realisieren, dass die Regierung im Kampf gegen COVID-19 bis heute nicht nur Gelder von internationalen Finanzinstitutionen, sondern auch Spenden und Geschenke erhalten hat. Es gab Budgetzuweisungen; einschließlich der Nachtragshaushalte wurden jedoch keine Mittel für den informellen Sektor bereitgestellt, und der Sektor wurde der Gnade der Philanthropen überlassen. Die Regierung hat jedoch den Auftrag, sich durch ihre Gesetze und ihre Politik um alle Menschen und ihre Probleme zu kümmern. Aus meiner Sicht kann die Regierung Folgendes tun, um den informellen Sektor in diesen schweren Zeiten zu unterstützen:

Die kenianische Regierung kann umfangreiche steuerliche und monetäre Maßnahmen durchführen, um Haushalte und Unternehmen im informellen Sektor zu unterstützen, die durch mangelnde Budgetzuweisungen betroffen sind. Insbesondere im Bereich der Sozialsysteme, d.h. Gesundheits- und Mutterschutzsysteme, Sozialversicherung, Sozialhilfesysteme und steuerfinanzierte Leistungen vor allem für die Armen, die wenig oder keine Leistungen aus anderen Formen des Sozialsystems erhalten. Die öffentliche Finanzierung des informellen Sektors ist von herausragender Bedeutung, da die überwältigende Mehrheit der Geschäfte im informellen Sektor sich aus eigenen Mitteln finanziert. Die Menschen erhalten hauptsächlich Geld von Freunden und Verwandten, Kredite und Vorschüsse von Lieferanten und Kunden, die in der Regel nicht nachhaltig sind. Sie sollten ermutigt werden, die Vorteile des Immobiliarvermögenssicherheitsgesetzes (Immovable Property Security Rights Act) zu nutzen.

Die kenianische Regierung sollte darüber hinaus auf die sozialen Institutionen und Gruppen innerhalb des informellen Sektors zugehen und dabei helfen, all jene zu registrieren, deren Geschäfte beeinträchtigt sind, damit sie in die Hilfspakete der Regierung aufgenommen werden. Diejenigen, deren Beschäftigungsverhältnisse gefährdet sind, sollten ermutigt werden, sich bei staatlichen Institutionen registrieren zu lassen, damit sie von den Konjunkturpaketen profitieren können. So sollte das Corona-“Sicherheitspaket” beispielsweise mit Direktzahlungen die genannten Gruppen erreichen, bis die Pandemie endet und die Geschäfte wieder geöffnet werden können. Geldtransfers sind eine gute Initiative und die Regierung muss sie vorrangig für gefährdete Gruppen (unter die der informelle Sektor fällt) einsetzen. Dieselbe Plattform kann genutzt werden, um die gefährdeten Gruppen weiter für das Gesetz über die Sicherheit von Immobilieneigentumsrechten und für die Verwendung von Wertpapieren zu sensibilisieren, was kleine Unternehmen begünstigt.

Die kenianische Regierung sollte zudem für die Zeit nach der Krise Konjunkturpakete für den informellen Sektor schnüren: Dieses sollte Bargeldtransfers, Vermögenstransfers und Unternehmenscoaching beeinhalten.

Letztendlich sollte die kenianische Regierung langfristig in Infrastruktur und den Aufbau moderner Märkte mit angemessener Raumgröße, Lagerung und Ausstellung für Händler, Handwerker und Bauern investieren. Außerdem ist der Ausbau der digitalen Infrastruktur und eine konstante Stromversorgung in ländlichen Gebieten essentiell. Die dadurch nutzbaren digitalen Plattformen sind ein progressiver Weg zur Formalisierung des informellen Sektors. Menschen werden zu Steuerzahlern und die Steuerbasis wird sich erhöhen.


By Joan Atim

We live in unprecedented times as the COVID-19 pandemic continues to inflict high and rising human costs worldwide. By protecting lives and allowing healthcare systems to cope, the health crisis has already had and is having a very severe impact on economic activity since contagion has required isolation, lock-downs and widespread closures to slow the spread of the virus. As a result, the IMF projects that the global economy is projected to contract sharply by 3% in 2020 much worse than during the 2008-2009 financial crisis and using a baseline scenario, the assumption is that the pandemic fades in the second half of 2020 and containment effects can be gradually unwound helped by policy support. Nevertheless, this seems rather unlikely due to the new infection rates in Kenya in recent weeks.

Measures have indeed been put in place by the government, however, these measures are restricted to the formal sector hence forgetting the informal sector that houses and employs a big percentage of the working population in Kenya; 83.6% of the total employment and 762.1 thousand new jobs in 2018
according to the Kenya National Bureau of Statistics. Dr. Jacob Omolo (economist at Kenyatta University) calls the sector a policy orphan and states that workers in the informal sector are most affected by these measures. It’s key to note the operations of the informal sector; which are quite dynamic. Underneath lie social relations and associations formed by people largely involved as traders, manufacturers, and small-scale farmers in their own right. Their interactions are trust-based, face-to-face relations, and transactions of inter-dependence. These social relations and associations fulfill multiple tasks and functions like addressing fundamental concerns, regulating members’ behavior, coordinating markets, production, consumption, distribution, protection, and transformation.

Moreover, recent measures by the regional block have affected this as Dr. Omolo argues, “the closure of borders particularly by Kenya’s trading partners in the East African Community, in-country travel restrictions have caused disruptions in the sector’s supply chains by constraining production, marketing, and distribution of goods and services and as such informal sector workers and operators have lost employment, income, and consumption.” In addition, the introduction of a reduction in turnover tax (now payable every month at a rate of 1% from the previous 3%) and presumptive tax (an advance tax paid by a person acquiring or renewing a business permit or trade license at the county government at a rate of 15% of the business permit fee or license) may not benefit the sector. The taxes are for small businesses whose gross sales does not exceed or is not expected to exceed KES 50 million from the upper limit of 5 million.

However, in no way do these changes capture the informal sector as the reduction in turnover tax would completely ignore the small businesses since there is no clarity on the status of businesses with turnover below the prescribed limit; (which most businesses in the informal sector seem to fall under). As for taxing reductions as announced by the president in his speech of the 25th of March 2020; the specific fiscal interventions aimed at increasing the spending power of individuals and cash flows for businesses and the Tax Laws as amended is according to KPMG beyond the COVID-19 interventions since drastic changes to the tax incentives and exemptions regime simply water down the tax reductions. Professor Attiya Waris (Director of Research and Enterprise at the University of Nairobi) on the other hand presents very interesting data and shows the percentage of registered taxpayers in a few African countries including Kenya by using the number of registered voters i.e., just 39% of 19.6 million registered voters are registered taxpayers (individuals and corporations-no data aggregation). The reason is that; there seems to be high unemployment and a higher probability that many of the
unregistered taxpayers are in the informal sector

Despite the above, the informal sector has continued to prove a useful concept for many policymakers, activists, and researchers because of the reality it captures. We acknowledge that the government has to date not only received funding from international financial institutions, but received donations and
gifts in the fight against COVID-19. There have been budget allocations; including supplementary budgets, however, allocations have not been made to the informal sector and the sector has been left at the mercy of philanthropists. The government has the mandate to take care of all its people and their
innovations through its laws and policies.

From my point of view, the government can do the following to cushion the informal sector during these hard times:
Implement substantial targeted fiscal, and monetary measures to support households and businesses in the informal sector. In particular, social protection schemes i.e. healthcare and maternity protection schemes, social insurance, social assistance schemes; and tax-financed benefits mainly for the poor, who receive little or no benefits from other forms of social protection.

Financing the informal sector should be an option explored with proper policies and regulations, because the overwhelming majority of informal sector business is self-fund. People mostly get money from friends and relatives, credit, and advances from suppliers and customers which tend not to be sustainable. They should also be encouraged to take advantage of the Immovable Property Security Rights Act while the government gives directives to financial institutes to lessen their financing requirements.

The Kenyan Government should further reach out to the social institutions and groups within the informal sector to help register all those whose businesses have been disrupted so that they are included in government relief packages. Those whose employments have been disrupted should be encouraged to register with their institutions and groups so that they can benefit from stimulus packages. Thus, the coronavirus “safety net” with direct payments should reach everybody until the pandemic ends and businesses reopen. Cash transfers are a good initiative and the government must prioritize it to vulnerable groups (under which the informal sector falls under). Moreover, the Kenyan Government should undertake post-crisis economic inclusive packages with the aim to introduce sustainable effects on the sector, i.e., improve cash transfers, asset transfers and business coaching in the long run.

The Kenyan Government should invest in long-term infrastructure and build modern market places with adequate room size, and storage that will accommodate traders, artisans, and peasants. Finally, the Kenyan government should invest in better digital infrastructures i.e., the installation of fibre optics
even in rural areas, and constant power supply as digital platforms offer a progressive road to formalization. The more people use them, the more they become formalized tax payers.

Interview with the Director General of Taxes, MOPA Modeste FATOING

Cameroon Tribune, 8th of May 2020 edition

Comments collected by Jocelyne Ndouyou-Mouliom and Aicha Nsangou

1. Mr Director-General, the Head of State has just released 19 measures to ease the restrictions imposed in the fight against Covid-19. About 10 of them are tax-related. Your administration was probably involved in the development of these measures, what are the prerequisites that led to their validation?

Tax measures are indeed prominently included in the support mechanism for businesses and households, decided by the President of the Republic, His Excellency Paul BIYA, and made public by the Prime Minister, Head of Government. These tax measures are the culmination of a process that involved the authorities, as part of a participatory approach, assessing the impact of the crisis on businesses, and then identifying possible solutions, to examine them, to evaluate them and finally to make choices. Since the outbreak of the crisis, under the leadership of the Minister of Finance, the tax administration has engaged consultations with the entire private sector through socio-professional groups (GICAM, ECAM, MECAM, CCIMA, APECCAM, Filière Bois, ASAC, CAFCAM, AMCHAM, SYNDUSTRICAM, Hôtellerie, Cimenterie, Association des Bayam Selam, Plateforme des Syndicats des Transporteurs, etc.). As a sign of the times, most of these consultations took place via videoconferencing for obvious reasons. The main aim was to gather from the main players in the economy, their assessment of the crisis, its impact on their
activities, and their proposals for support measures expected from the authorities
In addition to this dialogue with the private sector, the tax administration has, thanks to the videoconferencing system, actively participated in numerous initiatives to exchange and mutualize best tax practices in response to Covid launched by international partners such as the OECD, the IMF, the African Tax Administration Forum (ATAF) and the Tax Administration Leaders’ Circle of Reflection and Exchange(CREDAF).At the end of all these consultations, the first observations made showed that the Cameroonian companies were affected, to varying degrees, by the crisis due in particular to the slowdown in economic activity at the international and national level, and the implementation of the first round of response measures. The consultations made it possible in this respect to identify the sectors most affected by the crisis, in particular the hotel industry, transport, companies whose activities are outward-looking; but also those which are less or very little. All the proposals identified were then examined and submitted to the authorities according to the various scenarios of the crisis.

2. To decipher in a specific way these measures, how to understand the one that concerns the suspension under the 2nd quarter 2020 of general accounting audits, except in case of suspicious tax behavior. What does that mean?
In a tax reporting system such as ours, it is the taxpayer who freely reports the activities he or she has carried out over a period of time and the amount of tax payable. In order to prevent this freedom from giving rise to abuse, tax checks are regularly carried out and often result in corrections of the declarations previously subscribed; this makes it possible to restore the equality of all before the tax.
In view of the impact of the crisis on the treasury of companies, the authorities wanted to exempt them from accounting checks which, by their nature, are likely to give rise to immediate payments of additional taxes. Since these accounting checks are on-the-spot checks within the undertakings, the requirement to comply with the rules on distance-sharing has also reinforced the authorities in taking this measure.
It should be noted, however, that this suspension does not apply in the case of suspicious tax behavior; that is, where a company bears a strong suspicion of fraud or of undermining its declarations. This safeguard makes it possible to limit the abuses and windfall effects that would not only deprive the State of resources but would also promote distortions between citizens’ taxpayers and those who are not.

3.This refers to the extension of the deadline for filing statistical and tax returns without penalties for the payment of the corresponding balance. What was the originally planned date and what will be done in case the payment has already been made?
The deadline for submitting statistical and tax returns (FSD) is 15 March of each year. Taking into account the difficulties that the companies may have encountered in subscribing to this declaration within this period, in the context of the current health crisis, the authorities granted them an extension of time to comply with this tax obligation without incurring penalties. Certainly, to date, some companies had already been subject to late filing penalties for their DSF. However, with the penalty relief that has just been granted, those companies to which penalties have been applied will be cancelled outright, and for those who have already paid them, they will receive a competitive tax credit, which can be carried forward to future payments. I would point out that it is this approach that will apply to all those who had already paid taxes in the second
quarter and who have been the subject of tax relief measures by the authorities.

4. Mr Director General, the President of the Republic has decided to support businesses through the allocation of a special envelope of FCFA 25 billion, for the clearance of VAT credits pending reimbursement. Is that enough to clear the state’s debt?
I think it is important to point out at the outset that the authorities have worked hard to improve our system of refunding VAT credits in recent years. In this respect, we can mention the escrow account mechanism set up which makes it possible to automatically allocate each month 6 billion FCFA to operations to refund VAT credits; the processing of applications following a risk-based
approach, making possible the spontaneous repayment without prior checking to the companies presenting no risk, the checks being done a posteriori; and, above all, the dematerialisation of the entire procedure for claiming VAT credits already implemented at the level of the Large Enterprises Directorate. The only difficulty that remained until then was the one related to the stock of credit
accumulated before the reforms I have just mentioned; stock valued to date at about 25 billion. Hence the allocation of this special envelope of equal amount that will make it possible to eliminate this stock pending reimbursement. I should also point out, so that it is clear enough, that this special envelope is in addition to the initial provision of 72 billion in the state budget for the financial year 2020.

5. Several tax payment exemptions are announced: property tax, tourist tax in the hotel and restaurant sector for the remainder of the 2020 financial year, starting in March; exemption from the duty-free tax and parking tax for taxis and motorcycles, axle tax for the second quarter. What were the revenue forecasts for these different revenue items?
Let me clarify that with respect to the property tax, this is not an exemption, but rather a deferral to September 30 of the due date of this tax normally set at June 30. This measure is aimed at households that are the main contributors.
As for the axle tax, the discharge tax and other municipal taxes, this is effectively an exemption limited to the second quarter. In addition, the Head of State had already long before the publication of the measures of 30 April 2020, declared the exemption of VAT and customs duties on materials and equipment directly intended for the fight against Covid 19. It should be noted that measures to suspend tax controls and enforce collection also have a cost. Overall, for the time being, all the tax support measures decided by the authorities are estimated at FCFA 114 billion, that is to say, 92 billion in internal revenue and 22 billion in customs revenue. This tax cost, as you can guess, is only a portion of the overall cost incurred by the authorities in the response to the severe Covid 19 pandemic.

6. The exemption, for the second quarter, from the duty-free tax and community taxes (market duty, etc.) for the benefit of small food retailers (bayam-sellam) is also approved. Have decentralised local authorities already been made aware?
As you have well perceived, these measures directly concern decentralised local and regional authorities which are the beneficiaries of the proceeds of these levies. With a view to the effective application of these measures on the ground, consultations are held with all the actors involved for their harmonious implementation. In any case, the Prime Minister, Head of Government, personally ensures that all measures of support to taxpayers decided by the Head of State are scrupulously respected. We work in this direction under the supervision of the Minister of Finance and his counterpart in charge of
decentralized local authorities.

7. Are compensations planned for these decentralised local authorities?
In the context of the necessary future budgetary adjustments to take into account the impact of Covid 19 on the public finances of the State and the decentralised local and regional authorities, the authorities will, as usual, make the necessary arbitrations so that the decentralised local and regional authorities can absorb this external shock.

8. Are new measures possible, particularly for better support for small and medium-sized enterprises?
It seems to me important to emphasize at the outset that when reading the 9 measures decided by the Head of State, no category of enterprise was forgotten: large, medium, and small enterprises, and even micro-enterprises are not left out. It should be noted that none of the measures taken excludes SMEs. Whether it is a question of refunding VAT credits which, moreover, concern medium-sized enterprises more in the light of the credits they accumulate as a result of the withholding mechanism; whether it is a question of suspension of tax controls or forced recovery. All these measures benefit SMEs in the first place.
In addition, some of the measures taken specifically target this category of enterprise. This is the case, in particular, of the suspension of taxes applicable to the transport, hotel and food retailers sector; that is to say, all the attention that is given to SMEs which, in a crisis situation, are generally the most affected. Now it is essential to point out that, in general, our tax system is not based on a lump sum and mandatory payments. It is designed so that you only pay when you do an activity, a turnover. Since the tax is based on real and not flat rates, companies which, as a result of the crisis, are temporarily out of business or have low turnover will have nothing or little to pay.

9. Are these tax measures sufficient to enable companies to cope with the consequences of Covid?
In the current state of the crisis, they seem to be largely up to the task. In fact, as I said earlier, we are in discussions with other tax administrations and technical partners that are dealing with the issue of taxation in this crisis. In this regard, I must say that almost all States adopt this approach of fiscal prudence. The facilities granted in most cases are administrative in nature
(suspension of tax controls and compulsory recovery, etc.).
Cameroonian companies are therefore not at all disadvantaged in this regard. Better yet, they have other exceptional advantages. Look, companies affected by the crisis can also benefit from the special transaction measure on tax arrears dedicated by the Finance Act 2020 promulgated by the Head of State. This is an important measure to support businesses by allowing them to benefit from substantial reductions in their tax arrears. These reductions go up to 75%. The State has thus decided to virtually erase all the tax debts of the companies registered until 31 December 2018. This is unprecedented. However, it is time-limited. I would, therefore, like to invite companies that have tax debts to seize this opportunity to clear them up and thus clean up their balance sheet; this would allow them to more easily access financing as part of the relaunch of their activities after the crisis. The approach is quite simple: it is enough to send a request to the Director General of Taxes and a letter of reply indicating the rates of abatement already fixed by the law is notified to the taxpayer.

10.How does the tax administration itself adjust to always be able to do its job and make it easier for taxpayers?
The many reforms carried out in recent years in the tax administration, which for the most part had as a common denominator ICT, have so far enabled our services to cope with crisis situations. The same is true of the current health crisis. In addition to the teledeclaration and the telepayment already operational for several procedures for several years, we have worked to
launch new online services accessible to taxpayers remotely from their offices or homes without making any physical trips. These include tax registration, tax litigation and the repayment of VAT credits, all of which are now digitalized.

11. All these tax exemption measures will cause a significant loss of revenue in the state coffers. How do you plan to redeploy to replenish the funds differently?
The crisis necessarily has an impact on the mobilization of revenues insofar as they are dependent on economic activity. This impact, therefore, goes well beyond the cost of support measures to include the revenue losses associated with the decline in activity. As you know, the tax revenues to be raised in a given year are projected on the basis of assumptions. For the 2020 financial year, they were set based on a real GDP growth rate of 4% and a GDP deflator of 1.4%, or a nominal GDP growth rate of 5.4%. We also expected a barrel price of oil of more than 50 dollars. In view of these macroeconomic parameters, an objective of
2.103 billion has been set for the General Directorate for Taxation, which, as you know, is the first item of revenue mobilization for the state budget.
After the first quarter during which the DGI has mobilised beyond the objectives assigned to it, with 537 billion mobilized against 463 billion for the same period in 2019, a progression of FCFA 74 billion in absolute value and 16% in relative value, The Covid-19 health crisis is upsetting all these assumptions: the growth rate is expected to fall significantly and the barrel of oil is currently, as you know, below 30 dollars. The revenue forecasts should therefore be
adjusted in due course. However, it should be noted, as I said earlier, that the reforms to modernise the tax administration, carried out with the constant support of the authorities in recent years, have enabled our collection system to demonstrate a strong capacity for resilience in times of crisis. We, therefore, rely on the fundamentals of this resilience, namely the mechanism of securing our revenues and modernizing recovery, to preserve most of the State’s resources.


Compiled by Clara Kitungulu

This article is based on a Committee on Fiscal Studies webinar and tax talk 35 that aimed to spark conversations about whether Kenya will be able to sustain its population with the current lock-down measures put in place as a result of the pandemic.

Food security is the availability of adequate, nourishing, balanced, and safe food at all times. It also entails that food is available, accessible, and affordable. According to the Food and Agriculture Organization, there is enough food to sustain Kenyans during this pandemic, and the major problem is its accessibility and safety. Before the pandemic reached Africa, food insecurity was already a reality, with areas such as East Africa where there was a problem of locust infestation. The locusts were moving in large swarms causing havoc to many farms by destroying crops, and it is important to note that even with the pandemic going on, they are continuing to breed and are in the second stage of inversion thus they will exacerbate the food security issue.

Vulnerable groups e.g. refugees, arid and semi-arid areas who rely mostly on international assistance will be disproportionately affected since borders have been closed. People living below the poverty line and children who were benefiting from school feeding programs will also be disadvantaged due to the containment measures which restrict charity and donations and the closure of schools. The sick also need more care since they are already in a disadvantaged situation of having low immunity and being unable to go out and access food.
Low-income households are also greatly disadvantaged since they cannot stock their homes with food in bulk, to buy ultra-processed foods with long shelf-lives, or the means to appropriately store food. Such households work in the informal sector and thus the work-from-home measure is not practical for them. An increase in the cost of production and transportation will cause an increase in food prices, which affects food affordability.

With containment measures in place, it has become difficult to transport food between counties leave alone imports and exports. If this continues, there will be an issue of two extremes, where some regions have excess food that is going bad hence being wasted, while other regions will lack food and there will be starvation. In addition to that, companies want to continue making profits causing food prices to rise and thus making food inaccessible to the vulnerable.

Urban areas are likely to be more affected. In rural areas, there is an advantage in that since there are farms, so most families will be able to sustain themselves with the subsistence food from individual farms. Towns and cities are the main consumers of food, yet they produce the least and pollute the most since the land is mainly used for infrastructural development. However, with new cleaner industrial production, reliance on rural areas should be less in the future, with the government encouraging urban farming. There is also a need for better urban planning to stop the city from encroaching to agricultural areas.

Storage is a major factor since there is a clear disruption in the food supply chain. There will be an issue of post-harvest losses, with perishables such as fruits and vegetables rotting, grains will be damaged by insects and toxins due to poor storage, and meat products such as fish, beef, etc. will spoil as there is no capacity to keep them fresh for long periods.

Small scale farmers are the most disadvantaged as they are likely not to have documentation which allows them to operate as essential service providers, therefore produce ends up spoiling as they cannot transport it and have no reliable storage facilities. It is important to note that small scale farmers are crucial in ensuring the country can be sustained food-wise. In addition, large scale farmers are also disadvantaged, but to a lesser degree as it is easier for them to get support from the government. The Strategic Food Reserve Fund and the National Cereals and Produce Board’s main role and focus has been seeds and legumes but this is not enough as regards food security and should aim to include fruits and vegetables, and the funds allocated should be used to bring small scale suppliers into the loop as it has in the past only been accessible to large scale food suppliers.

The Tax Amendment Bill 2020 contains three issues that directly affect food security, which should be reconsidered and eliminated since they do not benefit the common citizen in any way and instead puts them under even more pressure economically. They include; Firstly, the proposal to introduce a tax to fertilizer (which was previously tax-exempt) and the result of this will be increased cost of production which will disadvantage food security regarding affordability. Secondly, is the increase of tax on fuels yet most agricultural products are processed this way, furthermore, this will be a challenge since it will push the vulnerable low-income households to use unsafe fuels such as charcoal. Lastly, the classification of bread to introduce a tax to non-basic bread i.e. containing anything other than wheat will lead to problems in terms of immunity since people should be trying to improve the nutritional content of food eaten yet they will not be able to afford such.

Some solutions suggested include;
Government to regularly supply food to low-income households during the pandemic, as is being done in Mombasa County

The government should work with major retailers to ensure that food is still available in the markets and other retail points so that people can access it and are able to purchase

Provision of preferential tax relief when it comes to food products and the food market thus ensuring that prices do not increase

Food safety agencies to be added to the supply chain to ensure inspection of the quality of food and ensuring that proper storage measures are taken, vehicles used to transport food should also be inspected to ensure that they are clean and fumigated before food is put in them

The government should invest in infrastructure such as solar-driven dryers to ensure excess food is properly preserved and support offered to farmers in terms of storage facilities to ensure food safety and non-wastage

Mobilizing different the national and county governments to work together in ensuring the whole county has access to food.