Revealed: Only 67 Hotels In Kenya Have Benefited From Multi-Billion Gov't Stimulus

 

Tourism CS Najib Balala at a past event PHOTO | COURTESY

By Kepha Muiruri For Citizen Digital

Only 67 hotels benefited from the billions of shillings allocated by the government as part of the COVID-19 economic stimulus program, according to disclosures by the National Treasury.

In its fourth medium-term plan (MTP) draft concept note, the Treasury reveals that 46 applicants were issued with offer letters worth ksh.1.37 billion as part of the State stimulus program.

At the same time, 21 establishments have received Ksh.427.5 million as soft loans for hotel refurbishment through the economic stimulus program (ESP).

The amount shared totals to Ksh.1.8 billion and is only Ksh.400 million shy of the Ksh.2.2 billion allocated to the program after a trim to the original sum of Ksh.3 billion.

The beneficiaries are however a mere fraction of hundreds of hotel facilities spread out across the country and point to the diminished impact of the sector-stimulation program which was geared at managing the fallout from the COVID-19 crisis.

60 per cent of the funds were to benefit coastal hotels while hotels in the rest of the country were to share out the balance of funds.

According to Tourism Cabinet Secretary Najib Balala, the lack of collateral to secure credit lines under the program has been the greatest limitation to the subsidy program.

“The biggest challenge stakeholders had was security. They don’t have enough security to conclude the process to access funds. The problem has not been with us releasing funds,” he said on January 19.

Recent parastatal reforms have however seen the role of the funds disbursement moved from the Tourism Ministry to Treasury with the Tourism Finance Corporation (TFC) now falling under the mandate of the Planning Ministry.

Like the wider tourism industry, hotels were among the worst hit segments at the onset of the pandemic.

Of the 1.2 million jobs lost in the sector in 2020 according to statistics from the Ministry, 295,000 and 162,000 jobs covered accommodation and restaurant services.

The pandemic is estimated to have wiped out Ksh.152.4 billion in sector labour incomes across the same period.