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How pandemic has brought Coast economy to its knees

THE STANDARD INSIDER
By Benard Sanga and Philip Mwakio | May 14th 2020

A lone tourist at the Jomo Kenyatta Public Beach in Mombasa on May 7. The beach was among the facilities closed by the government to curb the spread of coronavirus. The economic situation at the Coast was on a downward spiral even before the pandemic hit the shores. [Gideon Maundu, Standard]

Even before the eruption of Covid-19, Mombasa and the Coast in general were experiencing a near-recession associated with the collapse of the logistics sector after the sudden launch of the Standard Gauge Railway (SGR) freight service.

As one logistical firm after another based at Mombasa port collapsed or moved to Nairobi, thousands of workers were left jobless, with Mombasa County losing 16 per cent of its revenue base between November 2018 and April last year.

Already, tourism and hospitality were reeling from paralysis from years of under-investment, competition from other destinations and rising insecurity.

What had remained of port business and the tourism sector has been reduced to zero with the rise of Covid-19 cases. The pandemic saw the evacuation of German and Italian tourists, and the collapse of the domestic tourism sector after most hotels at the Coast shut down.

Even fishing, the other mainstay of coastal people, has not been spared as the port, the main entrance to Kenya, reels under a heavy viral infection.

The multi-billion shilling nightlife, tourism and the supply chain sectors, have been shattered, with thousands losing their jobs following the outbreak of Covid-19.

Kenya Tourism Board chairman Jimi Kariuki says although the growth in tourist arrivals in 2019 was slower than the previous year, Kenya was on the right path and moved well into 2020.

“There was good growth from several key source markets that feed Kenyan tourism coupled with growth in domestic tourism,” Mr Kariuki, who is also the managing director of the Sarova Group of Hotels, said.

He said the coronavirus pandemic has hit the global tourism industry extremely hard.

“Millions of jobs that depended on a healthy travel and tourism sector are now at risk,” Kariuki said.

Meanwhile, statistics indicate that sale of used cars in showrooms in Mombasa has dropped by 90 per cent from 10,000 per month before the outbreak of the pandemic to 1,000 currently, according to Car Importers Association of Kenya (CIAK).

CIAK chairman Peter Otieno said imports have not dropped because traders had placed orders before the first of Covid-19 was reported in Kenya on March 13.

“We, however, expect a drop in coming weeks,” he said.

At the Mombasa Tea Auction, one of the biggest tea auctions in Africa, the volumes of tea not sold rose sharply after some buyers boycotted the trading floor for fear of infection at the open sale.

Tea volume

A report from the auction of March 31 revealed over 27 per cent of the total volume of tea that were offered for sale or 3.5 million kilogrammes were unsold.

On average, the volume of tea not sold in the recent sales, including last week, stands at two million kilogrammes.

Analysts say the rise in the volume of tea not sold was because of the virus.

“One of the biggest buyers stayed away, but we have since put in place measures to keep the virus at bay,” said Edward Mudibo, managing director of the entity that runs the auction.

Any disruption of the auction could have a multiplier effect on many in most sectors in Mombasa like warehousing, transporters, packers and hundreds of private firms involved in the sale.

“Tea is the most critical agricultural sub-sector and its cultivation and manufacturing spread across 15 counties,” said Dominic Mokua, a tea trade analyst in Mombasa.

According to data from the Agriculture and Food Authority, tea contributed Sh117 billion to the country’s Gross Domestic Product in 2019.

Yesterday, three Chinese fishing vessels were stranded at the Kenya territorial waters awaiting the health inspections and licensing to start trawling on the Kenya waters.

According to the Kenya Maritime Authority, fishing vessels are also subjected to more stringent health measures. Some fishermen said the rules have elbowed them out of the trade.

“The curfew means that we cannot go out to fish. We used to wake up as early as 3am to go out but we can’t because of the curfew,” said Ramadan Kenga, a fishmonger at Mombasa Old Town.

He said because there were not enough customers, they cannot go for a big catch because the fish will rot given their cooling plant at the Old Town market had a mechanical problem.

Importers have said the measures put in place by Kenya Ports Authority have caused a two-day delay in the clearance of cargo from the Port of Mombasa.

Distribution disruption

A report by the Economic Commission for Africa has warned that the disruption of the distribution chain could lead to a spike in the cost of essential services and goods in the country.

After the first case of Covid-19 was reported in Kenya, Governor Hassan Joho ordered closure of clubs, bars and other entertainment places to keep the virus at bay.

Most clubs and bars in Mombasa’s Nyali area, near Kenol Kobil and along the Bamburi-Mtambo road, are now up for sale following collapse of the business.

At Kenyan Coast’s largest public beach, Jomo Kenyatta in Mombasa, the usual beehive of activity have disappeared.

One can only see a few fishermen with their fishing nets folded and walking knee-deep in waters to land their catch.

Two armed police officers manning a police booth are the only other human beings around this area that is always full to the brim with humanity from all walks of life relaxing on the beach.

Covid 19 Time Series

 

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