Dr. Patrick Njoroge, Governor of the Central Bank of Kenya, speaks to COVID-19 Africa Watch about Kenya's economic journey since the onset of the pandemic, the role government has played in mitigating the worst impacts on households and businesses, and the reasons for optimism when it comes to the path ahead.

Key Takeaways

Below are a few of the main takeaways from COVID-19 Africa Watch’s conversation with Dr. Patrick Njoroge, Governor of the Central Bank of Kenya (CBK).

The CBK’s immediate pandemic mitigation measures were aimed at protecting the most vulnerable and at keeping households and businesses afloat. These included direct benefit payments to the population (facilitated and monitored through the use of digital finance), lowering some taxes temporarily, and commercial banks’ restructuring of about 57% of loans within one year of the onset of the pandemic.
Now, longer-term measures are focused on the post-COVID-19 era. The government has put in place an “Economic Recovery Strategy” to strengthen those sectors that were hit hardest, like tourism, services, and small and medium enterprises. Low interest rates in the US and Europe may present the opportunity for governments to refinance some of their external loans, thus further bolstering fiscal sustainability.
Given that health shocks are the single most important factor driving people back into poverty, the COVID-19 pandemic has been a setback in terms of poverty levels and progress towards achieving the UN Sustainable Development Goals.
On the positive side, FinTech has allowed Kenya to make strides in terms of financial inclusion for its population, and the applications are spreading beyond purely financial services and the banking sector. Now that the conversation is no longer about access, there is a need to think more about use and about expanding the span of products in the FinTech ecosystem, for example, in the insurance sector.

The interview was conducted by the CBK’s Anthony Murimi, an IFC-Milken Institute Capital Market Scholar.