Corona sinks 2 million Kenyans into poverty

A child stands in the corridors of the iron sheet houses in Kibra slums, Nairobi, on September 5, 2020. [Elvis Ogina, Standard]

The Covid-19 pandemic pushed up the number of poor Kenyans by almost two million, wiping out more than five years of progress the country had made in the fight against poverty.

This even as the World Bank revised its earlier projection on Kenya’s economic growth, with the Washington-based institution now estimating that the economy would shrink by one per cent in the worst-case scenario.

Kenya’s economy, said the World Bank, is however expected to rebound in 2021 - growing by 6.9 per cent buoyed by a resumption in learning activities.

Following the stringent containment measures against the Covid-19 pandemic recorded in March, a lot of firms shutdown, leaving many workers without a source of livelihood.

The study by the World Bank found that due to the impact of Covid-19, poverty levels in the country rose by four percentage points, adding 1.9 million Kenyans to the tally of poor people.

“This kind of poverty might be transient, but it might be permanent. We don’t exactly know because we are in the middle a crisis,” said Utz Pape, a senior economist at the World Bank covering poverty and social portfolio for the lender in Kenya.

Most firms, said Pape, either closed or reduced sales leading to people losing their source of livelihoods. Forty per cent of the firms, the survey found out, are not completely open.

The data was retrieved from the phone survey done between April and May.

They interviewed a lot of household representatives in Kenya. Nine in 10 firms reported reduced sales during this period.

“Reduced revenue … leads to firing of workers on shorter time,” said Pape. Around this period, official data show the economy contracted by 5.7 per cent even as 1.7 million people lost their jobs.

A lot of people affected by reduced income resorted to different copying mechanism including reducing food portion, selling their assets or dipping on their assets.

The World Bank advised the State to ramp up cash transfers to those affected by the pandemic to alleviate the poverty rates.  

The government has, however, put in place measures aimed at cushioning those negatively affected by Covid-19, including cash transfers to the elderly and other vulnerable groups.

Unemployed youth have also been working in estates under the government’s Kazi Mtaani initiative, aimed at putting some money in their pockets.

A Post Covid-19 Economic Recovery Strategy also proposes an unemployment insurance fund for those who lose their jobs due to the adverse effects of the pandemic.

The World Bank also revised its growth projection as the country continued to deal with the second wave of infections and now projects the economy will shrink by one per cent.

The negative growth was a revision from an earlier estimate of 1.5 per cent.

The revision was due to the closure of schools, which had a deep impact on the economy with the sector contracting by over 50 per cent during this period.