The novel coronavirus pandemic has delivered a deadly blow to Kenya’s ailing economy, with consequences that may take years to address.
The stark reality speaks for itself. The loss of jobs that we have witnessed in the last two months undoubtedly raises the spectre of difficult times ahead.
So far, more than a million jobs have been lost, most of them in the informal sector. Many more will be lost in the coming weeks.
A report by the Ministry of Labour and Social Protection indicates jobs in excess of 200,000 have been lost in the formal sector. This number, however, excludes employees on unpaid leave and those who have taken pay cuts.
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Several local companies have declared redundancies, others have closed shop altogether, while many others have suspended operations as the Covid-19 effects ravage revenue streams.
Last week, the indefinite closure of Fairmont hotels sent shock waves in the tourism industry. The management closed Fairmont The Norfolk in Nairobi and Fairmont Mara Safari Club in Narok over what it termed the “spiral effect of the Covid-19 pandemic and the recent flooding of Fairmont Mara Safari Club”.
The iconic hotel chain joined a long list of firms that have had to take drastic actions in these most desperate times.
The looming danger is that the corona effects, if not well addressed, will lead to an unfathomable crisis of unemployment. The State has to act fast in the short-term to avert this ticking time bomb.
Before the coronavirus crisis, government figures, corroborated by recent United Nations Development Programme reports, showed that nearly 40 per cent of the adult population in Kenya was unemployed, and 45 per cent of graduates could hardly find jobs. Add this to the corona-related job losses and we have a worrying trend.
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Unemployment has a ripple effect on the economy, welfare and security of a nation. Mostly, hapless youth resort to crime, aggression, political unrest and other unorthodox means to survive.
At this rate, we can confidently say the next 18 months will be critical. We need to invest more in the resilience of institutions. President Kenyatta’s recent Sh53.7 billion stimulus package was timely. However, considering the monumental challenge at hand, it is a drop in the ocean. We need more aggressive interventions.
We take this early opportunity to urge the government to pursue more economic stimulus programmes and review its other flagship empowerment initiatives, such as the Youth Fund, the Women Enterprise Funds and the National Youth Service. Endemic graft shouldn’t undermine these programmes. Also, the government should extend more tax reliefs and make them work.
The launch of the National Hygiene Programme unveiled on April 29 to create jobs and protect public health was a welcome idea. The first phase of the programme will begin by employing 26,148 young workers in the health sector. The plan is to employ more than 100,000 youth to bolster healthcare.
In the current circumstances, everyone has a role in ensuring Kenya survives this pandemic. The private sector, too, should pursue tangible and practical economic interventions. More focus should be on job-creating sectors.
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Critically, putting emphasis on manufacturing, low-cost housing, infrastructure, better security, agriculture and healthcare will suffice. More than ever, the country needs a robust economy that will attract foreign direct investments and enable businesses to thrive.
We urge the government to formulate a thorough post-corona economic recovery plan first by activating micro, small and medium enterprises across the country. While the global economy has taken a beating, there’s more work to do for the president and his team in government.
Most importantly, the government should consult widely and avoid populist actions that may not translate into benefits. The virus has had unforgiving effects on virtually every citizen.