Kenya’s Economy Melts By 5.7% In Second Quarter Of 2020

Covid-19 seems to be weighing heavily on the economy of Kenya. With businesses shutting down and people losing their jobs, hopes of the economy rising and smiling as 2020 snails on are dwindling.

Stats released by the Kenya National Bureau of Statistics (KNBS) shows that Kenya’s economy contracted by 5.7 percent in the second quarter of 2020.

According to the stats, this the deepest contraction in nearly 20 years as the country continues to face the uncertainty brought by the sweeping Covid-19 pandemic that has affected virtually all the sectors.

Economic activity was hurt by lockdown measures imposed to curb the spread of coronavirus including a country-wide dusk-to-dawn curfew, restrictions on travel in and out of the capital Nairobi and closure of learning schools, hotels, and restaurants.

“Although Kenya was somehow spared the severe effects of the Covid-19 pandemic in the first quarter of 2020, the economy was significantly affected by the disease in the second quarter of 2020,” KNBS said in its latest GDP report.

The agency says as a result of the pandemic, the performance of most sectors of the economy were to a large extent negatively affected by the measures with output considerably constrained and in some cases came to a complete halt.

During the quarter, the tourism sector was the worst-hit. The sector contracted by 83 percent, though the Ministry of Tourist placed the contraction at around 93 percent. The number of visitors arriving in the country was completely cut off by the travel restrictions.

READ: Kenya’s Economy Grew 4.9% In Q1 Of 2020: Any Hope Ahead?

The manufacturing contracted 3.9 percent in the second quarter compared with a 4.0 percent growth the previous year while transportation and storage slumped 11.6 percent from a 7.6 percent growth.

Farming activities expanded by 6.4 percent compared with 2.9 percent in a similar quarter the previous year on the back of favorable weather which helped boost tea production, cane deliveries, milk intake, and fruit exports.

“Tea production increased by 34.5 percent from 106,314 metric tonnes in the second quarter of 2019 to 143,037 metric tonnes in the review period. Fruit exports increased by 34.8 percent to stand at 35,531 metric tonnes in the second quarter of 2020,” said KNBS.

President Uhuru Kenyatta has since “opened up the economy” and the move is expected to help boost the economy including the tourism and hotel industries. However, the recent rise in Covid-19 cases is threatening the current freedom and some measures might be imposed.

READ: Kenya’s Economy To Grow Below 2.5% In 2020