After five months of unsuccessfully trying to get a job, including the government’s Kazi Mtaani programme, Daniel Marando, a resident of Kibra, contemplated suicide as a way out of his financial troubles.
In March, just as Kenya recorded its first case of coronavirus, throwing the country’s stock market into a tailspin, Marando lost his job as a security guard. He had been employed by one of the leading private security firms, which had posted him at one of the high-end hotels.
However, Mr Marando and 27 others that used to man the hotel, were declared redundant after the hotel severed ties with their employees owing to cashflow challenges occasioned by the Covid-19 pandemic.
It is his wife, Yuniah Kemunto, a hawker of second-hand clothes at Toy Market in Kibra, who talked him out of the suicide attempt.
As soon as he gets enough cash he will retire to his rural home in Kisii County, joining a pilgrimage of fired workers who have been escaping from the harsh urban life as the cost of living gets unbearable.
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He has not paid rent for four months since he was fired. A send-off package the company promised when they laid him off has not been forthcoming. And he remains within the State’s statistic of job-seekers, and has everyday tried his hand at almost everything.
The father of three says they have forgotten breakfast and only eat supper. “Most of the food we eat is sent by my parents in Kisii,” says the 38-year-old who worked for the security company for seven years.
For a while, they have been relying on trifling income from his wife’s business. But with the ban on importation of mitumba, this revenue stream is also drying up.
“Since I came to Nairobi 15 years ago, I have never suffered as I have in the last five months,” Marando said.
It is five months since Kenya recorded its first case of Covid-19, setting off a health and economic crisis. Hundreds of businesses, including airlines, schools, pubs, nightclubs and hotels, went for long without operating.
As a result, hundreds of thousands of workers were laid off, leaving families without money to buy food, pay rent, electricity and other needs.
The economy, which includes a mishmash of almost everything that has a monetary value including the services offered by the hotel that Marando guarded or the security services his employer offered the hotel, is set to take a serious beating.
Economic forecasters such as the International Monetary Fund (IMF) project that the size of Kenya’s economy is set to shrink for the first time in 20 years, following stringent containment measures aimed at curbing Covid-19. These containment measures, which include a ban on all kinds of social and political gatherings, a dusk-to-dawn curfew, and many other social distancing rules have inhibited movement of people.
As much as restriction of movement of people curbs the spread of the virus, it also curtails the free-flow of money. Money, just as the coronavirus, is moved by people.
But people are not moving, translating to less economic activities. An eerily empty Jomo Kenyatta International Airport received only 12 visitors in April compared to 109,514 in the same month last year.
Fewer visitors coming into the country means fewer business opportunities for airlines such as Kenya Airways, which sacked some of its employees months after putting them on a quarter of their salaries.
Fewer visitors mean fewer business for hundreds of travel agents, most of whom had been sent on unpaid leave. Fewer visitors mean less business opportunities for duty-free shops at the airport, traditional yellow taxis at the airport and ride-hailing taxis such as Uber and Bolt.
Fewer visitors mean fewer beds in high-end hotels being occupied. And without bed occupancy, the hotels can’t afford to pay for services offered by security guards like Marando.
It is not just foreign visitors, who have kept the hospitality industry buoyant, and replenished the country’s coffers with critical foreign exchange currencies, movement within the country has also been limited.
For five months, the Standard Gauge Railway (SGR), whose passenger trains plies the Mombasa-Nairobi route, managed to move only 95,472 passengers.
This is compared to 530,168 passengers that were moved by the SGR in the same period last year.
This traffic of people did not only earn Kenya Railways Corporation revenues, but also the fast food stalls at the railway stations, matatus, taxis, hotels, curio dealers and so forth.
In May and June, there was no movement of people between the coastal city of Mombasa and Nairobi, as the government maintained a partial lockdown of four counties.
Simon Kimutai, the chairman of Matatu Owners Association, told The Standard recently that revenues for public service vehicles (PSVs) had dwindled by 60 per cent as a result of this partial lockdown.
Early last month, President Kenyatta eased movement of people into and out of Nairobi Metropolitan, Mombasa and Mandera, re-igniting a flurry of economic activities as buses, mini-buses and trains roared back to life following a two-month hiatus.
It will still not be easy for PSVs with social distancing rules that requires matatus and buses to carry half of their capacities still in place.
A household survey by the Kenya National Bureau of Statistics found transport costs had more than doubled in some areas as a result of these measures, a situation that further inhibits movement of people.
For five months, over 200,000 private school teachers have not been paid after the government declared 2020 a lost year. This also applies to those employed by boards of management.
For five months, bartenders, bouncers, entertainers, have not had their daily bread. Hundreds of permanent employees have also seen their wages slashed - those for battered companies like Kenya Airways, by up to 75 per cent.
For five months, those hawkers that used to harass you along the Nairobi-Nakuru highwayhave had little, if any, income.
During this period, the value of transactions on payment card- debit cards, credit cards, Point-of-Sale machines and prepaid cards dropped by Sh75 billion. Mobile payments have also gone down, helped slightly by the government’s monthly transfers to the vulnerable people in the slums. This distress is now being reflected in the banks’ balance sheet as lenders grapple with a spike in bad loans.
As more borrowers show signs of distress, banks have been forced to put aside billions of their income as insurance against possible defaults.
This has eaten into their bottom lines, with bank profitability declining by almost 90 per cent to Sh7 billion in April, according to data from CBK. By the end of April last year, all commercial banks combined made Sh56.8 billion in profits before tax.
Hotels hardest hit
In some cases, lenders have been forced to restructure the loans of borrowers distressed by the pandemic. A total of Sh844 billion worth of loans had been restructured, that is their terms changed by the end of July.
Loans which have not been serviced for more than three months, as a ratio of total loans rose to 13.1 per cent in June compared to 13 per cent in May, CBK data shows.
The toxicity of the bad loans has poured over into the auction market, as banks sought the services of auctioneers. But with depressed demand, there have been no takers of these distressed properties.
The hospitality industry has been one of the hardest hit by the virus with Kenya losing Sh80 billion so far in tourism revenue. President Kenyatta has been re-opening them gradually. Hotels and churches have been re-opened. Flights have resumed.
However, schools, pubs and entertainment joints might not be open soon as infection rates continue to rise. By end of yesterday, more than 30,000 people had been infected, with the country recording 474 deaths.
The government has also unveiled a Sh53.7 billion stimulus package aimed at pumping money into the economy. Victims of Covid-19 have tried everything to survive. Marando tried to secure Kazi Mtaani without success.