How Can The Kenyan Government Protect The Poorest And Most Vulnerable Against Effects of COVID19?

The World Bank, in its Kenya Economic Update, says that the hardship from the COVID19 crisis would disproportionately befall the poorest and most vulnerable groups in Kenya.

According to the World Bank, the poorest and the vulnerable do not have resources to cope with the lockdowns and quarantines needed to contain the spread of the pandemic. Many depend on farming (for rural), self-employment, and informal wage (for the urban).

They have limited coverage of pensions and unemployment insurance schemes, which makes most restrictive containment measures less effective.

Protecting earnings and reaching them through transfers is also considerably more challenging due to the lack of a proper physical address system and a lack of updated household welfare registers.

Kenya is at an advantage position, however, because it has social protection and social assistance programs that can be easily scaled up and coverage extended. This program could be supplemented by mobile payment channels.

Mobile penetration continues to rise in Kenya– providing access to digital communications, internet, and mobile payments (including MPESA, Airtel, and Orange money).

As of March 2019, the number of active mobile subscriptions in the country was 47.0 million, while mobile penetration was at 90 percent.

The near-universal adoption of mobile phones reflects multiple SIM ownership by individual consumers. An estimated 46 percent of citizens had access to broadband connectivity at the end of 2018, with mobile broadband being the predominant means of internet access.

By providing a convenient platform for sending and receiving money and short-term credit, mobile money has become a key mechanism for poverty reduction in Kenya.

The value of mobile money transfers has increased by 9.5 percent from Ksh.3,638 billion in 2017 to Ksh. 3,984 billion or 44.7 percent of annual GDP in 2018.

Furthermore, mobile money wallets are used as transactional accounts rather than simply providing a means of receiving cash. Thus, mobile payment platforms have sufficient coverage, provide the ability to established one’s identity (by working closely with telecom companies) and potential beneficiaries already have an account.

The combination of available cash transfer schemes (for scale-up) and sufficient coverage of mobile payments should be maximized in protecting the poor and the most vulnerable households. The following programs have the potential for scale-up and could help in protecting livelihoods.