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Kenya: Virus Effects On Economy May Force Relaxation of Controls

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5 years ago

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Last week, dozens of women who wash clothes for a living, popularly known as mama fua, held a solemn demonstration in Nairobi, protesting against their loss of jobs due to the Covid-19 pandemic.

But their protests went largely unnoticed since almost everyone in the country is experiencing their own pain as a direct or indirect consequence of the health crisis.

If there is any reason why President Kenyatta will be forced to relax the travel restrictions and measures imposed to deal with the pandemic, then it is their impact on the economy.

JOB LOSSES

All sectors of the economy are hurting, tax collections have dropped and hundreds of companies are retrenching staff in massive job haemorrhages to ever visit East Africa.

Kenya’s economy is projected to take a big hit from the pandemic, bigger than what the post-election violence and the global economic meltdown of 2007 did.

Current projections by various institutions among them the World Bank, the National Treasury and other think tanks put the economy to grow at best at 2.5 per cent this year, and at worst to shrink to negative one per cent.

Latest tax numbers show that collections dropped by Sh20 billion in April, compared to a similar period last year.

Treasury data indicates that tax collections shrunk to Sh120.1 billion in April from Sh140.41 billion in same month last year, representing a 14.46 per cent drop. This is a sign of things to come if the current trend is not reversed. Both imports and domestic consumption have also slowed down as a result of the impact of Covid-19.

Though there is no official figure of the number of Kenyans put out of work so far, estimates suggest that the numbers could be racing towards the two million mark.

JOB LOSSES

By the beginning of June, at least one million had been fired. In the last one month, more companies that could not hold on anymore, threw in the towel and severed their links with their staff.

The worst hit are firms in the tourism, hospitality, aviation and horticulture sectors.

Hundreds of thousands of teachers in more than 1,932 private secondary and 8,000 private primary schools alongside those employed by school boards have gone without pay for more than three months. The security sector that employs hundreds of thousands of guards has also not been spared.