Cry of Kenyans thrown out of jobs due to Covid-19

Small scale business owner roasts maize at the Kangemi bridge along Waiyaki Way in Westlands, Nairobi. [David Gichuru, Standard

Emmanuel Ojuko Adhoch will never forget March 19, the day when some of the major dreams he has been holding for the past eleven years crashed almost literally.

He was among the many employees summoned by the Human Resource department at the Nairobi, Ruiru based Tropical farm management for a quick afternoon chat at the company’s boardroom.

Following the effects of the Covid-19 pandemic on the company’s performance, he could sense it was not going to be good news anyway, a fear which the human resource confirmed shortly.

“The company took us through the prevailing situation affecting its performance, they had no option but to let some of us go home, and I was one of the casualties,” he says in a phone interview from his Kisumu home where he has since relocated.

“It was a short notice which we were not prepared for, but we understood the situation as the impact of the pandemic affected different sectors of the economy,” he says adding that life has not been easy since then with an ailing mother and a kid to take care of and no defined source of income.

He has been on the lookout for job opportunities but he has not been lucky as most companies are cautious about hiring due to developing layers of covid-19 waves.

Just like Mr Ojuko, John Mbungi (IT professional) and Samuel Mbithi (Sales expert) also parted ways with their lucrative jobs due to the pandemic. Samuel Mbithi who was in charge of sales in Rift Valley, Western and Nyanza region for a motorbike distributor lost his job sending him back to a drawing board with a young family to support.

Through a partnership with banks and micro-finance institutions, the company sold motorbikes on credit to the boda boda riders. "The problem started when Covid-19 restriction measures such as curfew were enforced, it reduced earnings of our clients making it hard for them to repay the loans. The company had to scale down operations and do away with some of us," he says.

His survival tactics during the period included scaling down his budget and settling his family in a cheaper neighbourhood as he struggled to get his way back into formal employment. Both Samuel Mbithi and John Mbungi are lucky to have landed new jobs early this year and can lead their normal lives.

In an interview with The Standard, Emmanuel Ojuko Adhoch hopes the government will put enough safety measures in the 2021/22 financial budget to take care of employment in the country. “The government should set aside reliefs and incentives for companies, this will enable such entities to access funds and protect workers from lay-offs triggered by crisis like the Covid-19,” he says.

In August last year, the Federation of Kenya Employers (FKE) surveyed micro-enterprises in Kilifi, Busia, and Kitui to understand the impact of Covid-19 on employment in micro-enterprise which is largely informal.

The results show that Covid-19 wiped out 34 per cent of jobs in the micro-enterprises. The 223 micro-enterprises that participated indicated that they had a total of 561 employees at the beginning of March 2020. This reduced to 370 by August 2020.

“If this is extrapolated to the 15 million wage employment in the informal sector, it means that Covid-19 did not only stop the creation of jobs in the micro-enterprise, it also wiped off 5.1 million jobs in the informal sector,” says the federation in a statement jointly signed by National President and Executive Director Habil Olaka and Jacqueline Mugo respectively.

Some of the reliefs introduced by the government at the height of Covid-19 included a 100 per cent Tax Relief for persons earning a gross monthly income of up to Sh24,000, a reduction of Income Tax Rate (Pay-As-You-Earn) from 30 per cent to 25 per cent, and a reduction of Resident Income Tax (Corporation Tax) from 30 per cent to 25 per cent.

Others were reduction of the turnover tax rate from the current three per cent to one per cent for all Micro, Small, and Medium Enterprises (MSMEs), appropriation of an additional Sh10 Billion to the elderly, orphans, and other vulnerable members of our society through cash-transfers by the Ministry of Labour and Social Protection, and temporary suspension of the listing with Credit Reference Bureaus (CRB) of any person, Micro, Small and Medium Enterprises (MSMEs) and corporate entities.

The National Treasury reduced the VAT from 16 per cent to 14 per cent starting April 1, 2020. All Ministries and Departments were ordered to pay at least Sh13 billion of the verified pending bills, within three weeks from the date.

The Kenya Revenue Authority was ordered to expedite the payment of all verified VAT refund claims amounting to Sh10 Billion within 3 weeks, or to alternatively allow for offsetting of Withholding VAT to improve cash flows for businesses.

Later, there was a waiver of fees levied on the transfer of money less than Sh1000 through Payment Service Providers (PSPs) on platforms such as Mpesa, while transfer transfers between mobile money wallets and bank accounts were exempted from levies.

Most of the measures have since been lifted throwing Kenyans into deeper economic hardship.