Economy could take two years to heal, says economist

It will take at least two years for Kenya’s economy to return to normal following the disruption caused by the coronavirus pandemic, experts have warned.

Economist David Ndii cautioned that the virus was not a “passing cloud” and estimated that in terms of expenditure, Kenya was bleeding Sh400 billion a month.

He said the economy would shrink to its worst this year with negative growth of three per cent.

“I want to disabuse people of the hope that coronavirus is a passing cloud. Asia is now experiencing a second wave that started in Singapore, Japan and now China,” said Dr Ndii (pictured).

“The best-case scenario in terms of economic impact is 18 months starting from January to June next year, and the impact will be huge.” 

Ndii was speaking Thursday night on a KTN News virtual forum that discussed the impact of Covid-19 on the Kenyan economy. The discussion was part of Transform Kenya, an initiative by the Standard Group that brings in experts to dissect the policy issues plaguing Kenya.

Thousands of workers have already lost their jobs with the most impact being in sectors such as airlines, horticulture, tourism and hospitality.

Gatundu South MP Moses Kuria, however, termed Ndii’s projections “scary” and said further evidence was needed.

“Without empirical modelling, that’s quite some scary statement to make. It must be subjected to serious scrutiny and analysis,” he said.

Mr Kuria argued that Kenya, with 234 confirmed cases of the virus, had reached a “plateau” compared to other countries.

“I’d call it a plateau as over the last two weeks, we’ve not gone over nine cases. Even in the US, figures provided by modelling proved to be grossly overstated,” he said.