How have companies and people in the private sector coped with the pandemic? We talked to CAROLE KARUGA (pictured), CEO of the Kenya Private Sector Alliance, to find out.
We are recovering
It has not been easy, but we are starting to see a recovery. At the same time, people are learning to live with Covid-19, so we are starting to see businesses coming back together. Using the Stanbic Bank Kenya Purchasing Managers’ Index, in terms of the recovery process, in July, the performance rose above 50 and hit 54 for the first time in 2020. The last time it hit 54 was two years ago. In August, it was 53. Once people start buying and selling, we shall be in a good path of recovery. We shall pick the pieces, some pieces faster than others. Leisure industries like tourism, travel, entertainment will pick slowly but some of the others may pick faster depending on the demand around the world.
We have changed tack
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The private sector has been very innovative, with a lot of it moving to digital platforms. There has been a lot of e-commerce and application of technology by most sectors. In innovating themselves, some of them have really gone off their core business to go into businesses where there is more demand, since demand lessened in some sectors. Some have renovated themselves to produce different goods and services.
We have amazing potential
I have learned that as a country we are resilient. It is unfortunate that we have lost many as we go along but as more people have become aware of what to do during the pandemic, we have seen a better response in Africa in general. We have also realised that there was a lot of potential that was not being exploited, because with the global value chains working we could get anything from any part of the world. When trade got disrupted, people had to look inwards. We have seen a lot of production even of local shoes, fabric, locally made furniture, which couldn’t compete with imported furniture before because the latter was cheaper. A lot more people are eating fresh produce as many are going into farming — so there have been good lessons learned, that there was so much potential within us that we were not exploiting because we were comfortable. This has brought the need, the demand, the scarcity and caused us to be innovative, so that has been good in that sense.
It has changed our outlook on life
On a personal level, I feel that life is very short. Some diseases like diabetes and hypertension were terminal but you could live with them. But with Covid-19, having such underlying conditions has affected most people. So we have realised it is better to do your best to avoid them as much as possible.
We have also learned that things can change overnight. No one imagined what 2020 could be. Everyone had plans. For instance, my work entails a lot of travel, but I haven’t travelled since February and I probably won’t travel until, maybe, next year. The things that were accessible are no longer accessible, the things we took for granted like meeting friends and family often — you start valuing those things. Sometimes when something is always available you don’t value it as much, until it is taken from you.
We have the tools to survive as a country
I valued the fact that we have a country that can produce food. It must have been tough for countries that don’t produce food and have to rely on imports. The biggest lesson has been to value a lot of what I used to take for granted.
As a country, we knew we needed to work on our production side, our production systems and value chains. We had started those conversations about really moving into local production with the president last year in May for several reasons. One, you create more jobs and the country gains more from exports than from imports. That conversation had started, but Covid-19 has taught us that it is a conversation that we must continue to have and continue to implement, to increase local production because the world can shut down in a moment. So, if you can’t produce, feed, clothe and house yourselves, you will be in trouble. We saw a lot of traders who are used to imports to sell suffering, so we want them to be able to sell more of what is produced locally than what is produced out there and only get from outside what we really can’t produce.
We can make long-lasting changes
I hope we don’t lose the path we have started of good hygiene and sanitation. Secondly, equipping our hospitals, having more personnel, training — I hope we don’t lose that and that it continues to be something that is sought after. This has been a global problem. Everyone thought that their health systems were well-equipped but it came as a shocker. Long-term, it means continuing when the pandemic is gone and we are back to operating normally. Setting up the right systems so that in case there is another pandemic, we shall be better prepared. We need to deal with our core problems of public health and the health sector as a whole.
The private sector will evolve faster
Long term, we will see some businesses gone forever with others coming back. Some have re-engineered themselves and are coming back as new ones doing very different things.
We have seen some growth especially in the food sector. We have also seen new ones come up, like the furniture sector, with some of them changing the current needs of furniture, shoe business, clothing — people are appreciating anything African more.
There are jobs that have been lost that may take long to come back. There has been disruption of how everything operates, so it is going to take a while. People have lost a lot of money and many businesses were trying to keep as many employees as they could, but it got to a point when some businesses had to reduce their employees.
Tech is the future
I think the future for the private sector is that the government and businesses will continue to put in any necessary preparedness and contingency measures.
Technology will definitely play a bigger role than it has been doing. We are in the tech revolution but the pandemic has accelerated technology. We will see a lot of innovations and new value chains.
There will be less dependence on singular trade markets
We expect new alignments in the world in terms of trade. We will also see fast-tracking on some of those that had started earlier. But we will also see a lot more dependency on local and not external markets. We shall see a lot of businesses shift their locations. The world woke up and realised that if China shuts down, the world shuts down. So everyone is looking at ensuring that they spread themselves out.
It’s time for Africa
It is a wake-up call for Kenya and Africa, not only in terms of food and clothing but even medicine. We have great scientists on the continent. We have a lot of good traditional medicines that we could use and take them through the different clinical stages. We can look back and ask ourselves: “What were the good things that we used to have but stopped using because we started looking outwards? Our own food, traditional medicine — what have we lost along the way that would be beneficial for us?”