Why The Allure Of Online Business For The Jobless Might Fade From January 2021

According to the stats released by the Kenya National Bureau of Statistics (KNBS) in September, Kenya’s unemployment rate grew two times between the month of April and that of June as 1,716,604 Kenyans lost jobs in the face of the Covid-19 pandemic.

The number of the employed in the country according to the data agency shrunk to 15.9 million Kenyans from a higher 17.8 million Kenyans in March. This was a result of businesses shutting down en masse and people losing their jobs due to Covid-19.

According to the stats, Kenya’s unemployment rate stands at 10.4 percent from 5.2 percent in March with the employment to population ratio sliding to 57.7 percent from 64.4 percent. The numbers are set to increase with the persistence of the pandemic.

The number of unemployed grew by 58.6 percent to 1.8 million Kenyans from 961,666 in the first quarter of 2020. The unemployment picture is however further exacerbated by a rise in the number of the long-term unemployed and individuals outside the labor force which masks the unemployed statistics.

The number of long-term unemployed defined as individuals with continuous periods of unemployment extending for one year or longer increased by 173,704 to 551563 persons or an effective 3.1 percent.

The unemployment rate in Kenya has been growing with each passing year. Learning institutions have continued emitting graduates into the already saturated job market with nothing to fall back. In fact, the task of looking for a job in Kenya is a profession on its own. Young people in Swahili say “kazi ya kutafuta kazi Kenya ni kazi.” (The job (task) of looking for a job in Kenya is a job on its own). Sic*

With the high unemployment rate, and in order to survive, many young people have rushed into trying their hand in businesses. The majority of them are in small business enterprises, commonly known as SMEs. But even there, things are tough. KNBS indicates that at least 450,000 SMEs die annually, 30,000 monthly, and 1,000 daily. Where is hope for survival?

Growth in the internet and online platforms in Kenya came as a reprieve to millions of jobless Kenyans. Kenyans saw an opportunity to embrace technology and invest in online businesses including marketplaces. Online businesses have, in the past few years, provided Kenyan jobless youth with something to hold onto even as they hope for a better tomorrow.

Some started online marketplaces where they use online platforms to reach both existing and potential customers with the hope of selling their products and services in an effort to make ends meet. Some ventured into content creating through blogging and amplification of products and services. Kenyans have also adopted ordering products and services through online platforms.

But a dark cloud is hovering on the horizon. The future for Kenyans who had found solace in online platforms lies in the balance as Kenya Revenue Authority (KRA) prepares missiles to go after them. The taxman hopes to roll out both the Digital Services Tax and Minimum Tax by January 2021. Who will stand to protect SMEs? Who will be the voice of the jobless youth in Kenya?