Why we will not go back to employment

Empty office [Courtesy]

There was a pressing need for businesses to adjust and restructure after Covid-19 disrupted most working environments.

There were retrenchments in many companies and several people that were laid off started businesses as a way of survival.

The economy is opening up but those that had been forced into business, are staying put to nurture their small businesses. They don’t plan going back into employment.

After the pandemic broke out last year, there was a surge in the number of new businesses registered. This was as many people who were fired from their jobs opened own businesses as they tried to survive.

Data from the Registrar of Companies shows the business names registered in the year to June this year rose to 101,674 compared to 73,302 in the similar period of 2020. This was a 38.7 per cent growth, which was a huge leap when compared to previous years when increase in the number of business names registered rose by single digits.

Among those who have savoured self-employment and love it despite the challenges associated with startups is Gabriel Gaita.

He previously worked as a chef but is now a mobile street food vendor.

“Shortly after Covid-19 broke out, the jobs reduced and we started getting meagre pay, sometimes we even went without pay. I then decided to quit and start this business of selling snacks,” he said.

The 23-year-old chef says that despite the curfew being lifted, which is a projection of the economy returning to normalcy, he has no intention of quitting his business and going back to employment.

“My business is better than a salaried job, I earn more than what my initial job was paying where I used to earn Sh15,000 a month,” he said, adding that he currently makes Sh3,000 a day.

Gaita now boasts being an employer, with three people working under him in different locations.

“When starting out, I would move about with a packet of smokies. Over time, this has grown and today, I sell up to 100 packets a day. I have employees in different places; Utawala, Mwiki and in town,” he said.

He makes smokies from Utawala to keep the supplies running. For him, expanding the business seems a more realistic dream than returning to employment.

Dr Samuel Nyandemo, an economist and lecturer at the University of Nairobi said many people previously in employment have learned the trick of self-employment.

Though forced into being entrepreneurs by circumstances, he noted that many are figuring out the ropes of self-employment and a good number are unlikely to go back to employment even as the economy starts reopening and their former employers restart hiring to cope with demand.

“For those whose businesses will pick very fast, they are not going to leave the businesses to go into employment. They have learned that self-employment is paying and they want to sustain that or grow it,” Nyandemo.

And as the economy reopens and some normalcy returns, he expects this to offer tailwinds to the different small businesses founded at the height of the pandemic. 

John Nyongesa is another entrepreneur who started a business after being let go by a hotel he was working for last year owing to Covid-19 disruptions.

“Initially I was employed in a hotel, but things got unbearable then I decided to start a shoes business,” he said.

Nyongesa started off with Sh4,000 and has not looked back. He has no plans to go back to employment.

The lifting of the curfew, he says, will boost his business as he can now operate for longer hours at his shoe shop at Nairobi’s Shauri Moyo Area.

“I sell from my stall during the day and when evening comes, I start hawking the shoes instead of closing,” Nyongesa said.

He is willing to go against all odds to remain in self-employment despite grim statistics about small businesses.

A December 2020 survey by Kenya Private Sector Alliance (Kepsa) showed micro, small and medium-sized enterprises (MSMEs), regarded as the bloodline of the economy, had fewer resources to survive in disruptions.

But the survey also found that when the operating environment for MSMEs worsened, they branched into making new products to survive the pandemic.

Among those who demonstrated agility during the crisis is Geoffrey Otieno. The thought of seeking for employment is far off his mind.

Mr Otieno was a fish monger, with several employees under him. But after Covid-19 hit, he closed down his fish mongering business on the back of a challenging environment.

He instead ventured into taxi business for survival with an eye on resuming his fish monger business later on.

“The fish business was disrupted by the pandemic. Sales went down and customers reduced. I decided to close down my fish business because I was no longer making profit from it,” said Otieno.

He has previously worked as a public service vehicle driver for five years before going into the fish business.

The Covid-19 control restrictions such as lockdowns made it difficult to run the business. That is how his taxi business was born.

The taxi driver said that he has plans of going back to the fish business now that the curfew has been lifted.

“The fish business is now picking up again. I am waiting on some funds to open up my stall again in Gikomba market,” he said.

Despite his plans to resume the fish mongering business, Otieno does not intend to stop his cab business. This presents a double win from the pandemic.

“The taxi business is flexible, I can do it any time I want, so I am planning to juggle the two at the same time. This means added revenue for me. When I reopen the stall, I will let my wife run it as I focus on the taxi business.”

Nyandemo, an economist, expects sectors such as Jua Kali to start picking up, owing to the lifting of the curfew and the State stimulus package.

Even as the economy opens up, the hospitality industry, which was hard hit by the pandemic and let many people go, is still reeling from the effects although showing slow but steady recovery. This might mean that people who worked in the industry might want to hold on to the ventures they went into after Covid-19 hit.

“The hospitality industry in Kenya will take time to recover. This is because international travels are still restricted. The cost of Covid-19 certificate and air transport is also alarming,” he said.

As the country gears up to the 2022 elections and politicians pump billions into the economy for campaigns, Nyandemo says he doesn’t “expect businesses to start springing up, except if it deals with readily available consumables”.

“Political rallies should be restricted to weekends only because rallies might scare away businesses that would have otherwise picked up faster, we need a working nation, not a politicking one.”

He said: “A lot of money in circulation cannot improve the economy. This is quick money from questionable sources now being released to the economy in large quantities.”