Anchoring Sectoral-Level Growth Amid Fragile Post-Covid Recovery

The Covid-19 pandemic has affected businesses and economies, not only in Kenya but around the world. Businesses have shut down, movements have been restricted, people have lost their jobs and there is so much hopelessness.

Global trade has, with no doubt, taken a major blow in the wake of the COVID-19 (Coronavirus) pandemic. The rates of imports and exports have tremendously dropped in every State in the world. Many are struggling to make ends meet.

According to the World Trade Organization, global trade was expected to fall by between 13% and 32% in 2020 as the COVID-19 pandemic disrupts normal economic activity and life around the world. As 2021 moves on, what is the way forward?

Kenya’s economy contracted by 5.5 percent in Q2, after a growth of 5.2 percent in Q1 of 2020. What are the prospects for 2021? What should individuals and businesses do differently in order to recover even as the virus continues to mutate?

After more than one year since the advent of the Coronavirus Disease (Covid-19), enterprises continue to reel from the adverse impact of the disruption.

While some sectors have not been significantly affected, most segments of the economy are struggling to regain their pre-covid flourish. The most affected sectors include travel, tourism, hospitality, aviation, education, and SMEs, among others.

The Travel and hospitality sector creates close to two million jobs, accounting for more than 10 percent of total employment in the country.

Beyond the fiscal and monetary interventions instituted in light of the pandemic, banks continue to collectively and individually explore ways of best supporting the affected sectors to aid recovery.

These include renegotiation of existing contracts and restructuring of payments. To date, the banking sector has restructured an estimated Ksh.1.7 trillion worth of loans, representing 57 percent of the sector’s estimated Ksh.3 trillion loan book.

In Kenya, the banking industry has been instrumental in helping businesses and individuals wade through the dirty waters of Covid-19. Kenyan commercial banks have had to restructure loans to give their customers time to repay amid the pandemic.

The truth is, the banking industry continues to implement post-Covid-19 strategies geared towards supporting affected sectors in Kenya. We have seen banks continue to engage customers whose businesses have been affected by the pandemic and exploring the best recovery financing options.

For instance, the banking industry, through the Kenya Bankers Association is spearheading a capacity-building initiative aimed at de-risking affected SMEs and enhance their ability to access credit.

To learn more on how sectors can recover during the Covid-19 pandemic, Kenya Bankers Association runs a series of chats and conversations with top bank CEOs to unpack and understand the sector. Today, Moezz Mir, the CEO of SBM Bank Kenya is on the bench.

“My Chat with a Bank CEO” was created by the Kenya Bankers Association in July 2012 to provide a platform for bank Chief Executive Officers to engage with the public on various topics on banking.

Hundreds of people like you have registered to participate in the quarterly live Web chat sessions during which the CEOs share information, give advice and receive feedback.

The sessions take place once a quarter, over a period of four weeks. Each session lasts approximately one hour.