Desert locusts overrun Kenya, forcing treasury to term the insects as “systemic risk” that will eat away the country’s medium-term growth target

Locusts invade farms in Kenya
  • Treasury has now termed the invasion by desert locusts as a “systemic risk” that is likely to prevent the economy from attaining its medium-term growth.
  • Treasury says potential disruption of agriculture caused by the locusts poses systemic risks to Kenya’s economy.
  • On Monday, Agriculture Secretary Peter Munya said it would take up to six months to bring the locusts under control.

Kenya may not attain its medium-term growth target of 7% thanks to the deadly desert locusts which are proving quite a handful.

The Treasury has termed the invasion by desert locusts as a “systemic risk” that is likely to prevent the economy from attaining its medium-term growth.

Locust invasion witnessed in the country in late 2019 and early 2020 poses a risk to agricultural production and food security,” says the Treasury in its recently released Budget Policy Statement.

“(The locust invasion) could have a negative impact on agricultural output, leading to higher inflation that could slow down economic growth.” it added.

Systemic risk is the possibility that an event at an industry level could severely hurt the entire economy.

While estimates of the economic damage caused by the migratory pests on pasture and farmlands are yet to be quantified, the Treasury says potential disruption of agriculture poses systemic risks to Kenya’s economy.

Early this month, the Inter-Governmental Authority on Development (IGAD) warned countries within East Africa to fasten their belts and brace for food shortage after the biblical desert locusts invasion swept clean farms and anything green on its path.

Food and Agriculture Organization (FAO) has also confirmed that the locusts have damaged about 70,000 hectares of land in Somalia and neighboring Ethiopia, threatening food supplies in both countries and the livelihoods of farming communities.

Other risks to the Kenyan economy, the Treasury cited, included public spending pressures, particularly related to wage-related recurrent expenditures as well as climate change and variability which it notes “has enhanced the frequency of disaster such as landslides, droughts and destruction of physical infrastructure”.

“The government continually monitors these risks to inform appropriate mitigating monetary and fiscal policy measures to preserve macroeconomic stability and strengthen resilience in the economy,” said the Treasury.

On Monday, Agriculture Secretary Peter Munya said it would take up to six months to bring the locusts under control.

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