Businesses & Financial News

More Kenyans worried about their incomes -Report

By Steve Otieno

Almost two in five working Kenyans are concerned about their income, a new research on economic impact of the Coronavirus pandemic has shown.

The survey, conducted by research firm GeoPoll found that a staggering 79 per cent of respondents in the country reported a drop in their income and were worried about their debt burdens.

Roughly 66 per cent of respondents, according to the GeoPoll study piloted between March 24th and April 12th, indicate that respondents aged between 15 and 25 feel that their income has decreased ‘a lot’.

The Economic Impact of COVID-19 in Sub-Saharan Africa report for May 2021 was released last week and further shows that spending on food and other necessities among Kenyans had fluctuated significantly since the start of 2021 owing to increased prices of food commodities.

“The overwhelming reason why respondents across countries say their spending on food and other necessities has decreased is that they have less money, about 76 per cent. For respondents that stated their spending on food and other necessities has increased, 85 per cent claim the increase is because prices have gone up,” the report notes.

The global pandemic has seen many industries suffer the brunt of a forced change in lifestyle as the government imposed measures to cut the spread of the disease.

As a result, many businesses closed down or reduced capacities, leading to income and job losses for many working Kenyans, while others were forced to take pay cuts.

The World Bank, in its biannual economic analysis for Sub-Saharan Africa in March 2021, for instance, projects the region to see a moderate economic growth this year, rebounding from the COVID-19 induced recession of 2020.

However, the resurgence of the pandemic and a looming fourth wave is dampening those projections, and many are at risk of suffering further setbacks to their personal finances and living standards, according Mary Munyiri – the Chief executive of micro finance company, ECLOF Kenya

“What you are likely to see is a gentle growth of the economy and that will depend if there’s a fourth wave. I also do not think companies will be looking to rehire new staff in the next months, but I can foresee collaborations to create synergies among companies,” said Ms. Munyiri.

Those sentiments were shared by Peter Biwott, a development economist who believes that the economic growth will be slower than the figures being quoted by various agencies and its rebound will depend on effectiveness in the vaccination process by the government.

“The pandemic has had an effect on job creation. It’s no longer a huge concern because the economy is now in a recovery path especially after the vaccination process began. If the vaccination process goes on as planned or even gets accelerated, confidence will be built among economic actors and the concern will be fully addressed in the medium term by 2022 end,” he said.

Unemployment rate in Kenya decreased to 7.20 percent in the third quarter of 2020 from 10.40 percent in the second quarter of the same year in a period that saw thousands and millions of working Kenyans lose their jobs due to the pandemic.

The joblessness rate measures the number of people actively looking for a job as a percentage of the labor force which is ordinarily reliant on the economic performance.

Kenya’s economy is expected to grow by 7.0 percent in 2021 on account of the resumption of international trade, strategic investments in the country’s development priority areas.

The Gross domestic product (GDP) is forecast to almost double by 2024, and unemployment, although still above 10 percent, is expected to remain on the decline.

Figures by Kenya National Bureau of Statistics (KNBS) indicates that nearly 4.64 million people were jobless at the end of June 2020, up from 2.94 million at the end of March 2020— the month Kenya first reported its Covid-19 case.

KNBS analyses the labor market situation for the population aged 15 to 64 years. Topics covered include labor force participation, employment, unemployment, Labour underutilization and inactivity.

 

 

 

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