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Kenya’s economic recovery is unlike any in recent history, powered by consumers with millions of shillings in extra savings, businesses eager to hire and enormous policy support.
Businesses and workers are poised to emerge from the downturn with far less permanent damage than what was seen in 2020.
New businesses are popping up at the fastest pace on record. The rate at which workers quit their jobs—a proxy for confidence in the labor market—matches the highest going back at least to 2000.
The speed of the rebound as witnessed by most survey firms is also triggering turmoil. The shortages of goods, raw materials and labor that typically emerge toward the end of an expansion are cropping up much sooner.
Many economists, along with the Central Bank of Kenya (CBK), expect the jump in inflation to be temporary, but others worry it could persist even once reopening is complete.
With the coronavirus still running rampant in many countries, one key question is whether the emergence of virulent new strains will trigger repeated stop-and-go cycles, as we’ve seen in some cases where economies reopened too soon.
One particularly ominous possibility is that more vaccine-resistant variants appear, heightening the urgency of vaccination efforts that have so far been too slow in many regions.
The writer is a contributor with Financial FORTUNE Media