Virus leaves 300,000 Kenyans without jobs in three months

At least 300,000 Kenyans have lost there jobs between January and March this year as the coronavirus continues to bite, a new report says.

The Kenya National Bureau of Statistics Quarterly Labour Force Report notes that the number of employed Kenyans dropped to 17.8 million as of March, a decline from 18.1 million people who were in employment by end of December 2019.

According to KNBS, the unemployment rate stands at 13.7 per cent as of March this year, from a rate of 12.4 per cent in December 2019. 

This could go up in the course of the coming months, as more companies come to terms with the impact of the disease and announce measures likely to leave more Kenyans unemployed.

“The survey revealed that the overall employment to population ratio in the country, for the working age population was 65.3 per cent in the first quarter of 2020. This was a 1.4 per cent decline from that recorded in fourth quarter of 2019 but a 2.7 per cent increase from the same quarter last year,” said KNBS in its report.

The corona virus pandemic has had a major impact on Kenya firms as they grapple with measures that the Government has put in place to curb the spread of the disease as well as come to terms with reduced demand of different products.

In some instances, entire sectors have had to endure total shut downs, leaving companies with little options but to send home their employees.

Such sectors include tourism and travel, where numerous players have shut down and sent home employees over the last two months either on unpaid leave or through layoffs.

Among the latest casualties is the Fairmont Hotels, which runs the iconic Norfolk Hotel, that laid off all staff last week and said it will indefinitely shut down its hotels.

Serena Hotels, also a major brand, last week sent home all staff on unpaid leave until further notice. The two brands join numerous other firms in the industry that have had to shut down temporarily while sending employees on unpaid leave.

Other industries such as horticulture initially had to incur heavy losses following a decline in demand in key markets following the restrictions instituted in the European market, which is a major market for Kenyan produce as well as a ban on international flights.

Recovery signs

There have however been signs of recovery, with some markets trying to reopen where there has been minimal disruption of cargo flights.

Manufacturers too have had to slow down activities owing to lengthy periods they have to wait for their inputs used in manufacturing because of supply disruptions. About 82 per cent of local manufacturers source their inputs from China. 

Small and Medium Enterprises (SMEs) whose operations are heavily dependent on imported goods, especially retailers, have had to shut down or reduced their workforce owing to frequent stock outs.

The cost of importing goods from China has risen since it takes longer between the time of placing orders and getting goods to Kenya due to global and local supply chain disruptions.

In the Economic Survey 2020, which KNBS published in April, the statistics agency noted that the economy created 846,300 jobs last year. A huge chunk of the new jobs were in the informal sector, which is reported to have created 767,900 jobs.

All these gains could be wiped out by the coronavirus pandemic, which has hit nearly all sectors, forcing firms to lay off or slash salaries of their employees in a bid to stay afloat.

In a May 1 address to the nation, President Uhuru Kenyatta noted that many jobs would be lost in the course of this year as more companies shut down.

Economic crisis

“This Covid-19 pandemic is not only a health crisis, it is fundamentally an economic crisis. Jobs have been lost, businesses have closed and the economy is on a go-slow,” said the President when he announced the Sh53.7 billion eight-point stimulus package that is aimed at reversing the impact of the hits that the economy is taking from coronavirus.

This is even as the Central Bank of Kenya (CBK) projects further job losses with small and medium enterprises in the country expected to face tough times ahead. CBK Governor Patrick Njoroge noted that a substantial number of SMEs could shut down by end of June.