According to the report released by the World Bank, more than two million households in Kenya have lost their businesses in the eight months that the economy has been reeling under the Covid-19 pandemic.
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 percent in the worst-case scenario.
A report that was released on Wednesday, November 26, indicated that a third of family businesses have closed shop since March 2019.
Government statistics in 2019 indicate that 7.4 million households out of the 12.2 million recorded in the country operated family businesses. The report also indicated that the remaining businesses experienced a 50 percent reduction in revenue due to the impact of the Covid-19 pandemic.
The World Bank said that Kenya’s economy is however expected to rebound in 2021 – growing by 6.9 percent buoyed by a resumption in learning activities.
“Almost 1 in 3 household-run businesses are not currently operating, and between February and June, average revenue from household-run businesses decreased by almost 50 percent. This has exacerbated food insecurity, and elevated pain and human suffering,” part of the report.
Following the stringent containment measures against the Covid-19 pandemic recorded in March, a lot of firms shut down, 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.
The report indicated that the poverty index in Kenya had ballooned by over two million people with wage workers the most affected. Most either closed or reduced sales leading to people losing their source of livelihoods.
It also noted that the government had deployed both fiscal and monetary policies to support the healthcare system, protect the most vulnerable households, and support firms to help preserve jobs, incomes, and the economy’s productive potential.
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.
According to the report, 93 percent of companies recorded a decline in revenue in the last 30 days as compared to the same period last year.