TOUGH TIMES

5.9 million jobs hit as Covid ravages economy

State considers reducing curfew hours to 9pm–5am

In Summary

•At least 5,991,768 direct and indirect jobs have either been lost or workers sent home on unpaid leave.

•Travel and tourism is the most hit with 3.1 million jobs affected including hotel employees, pubs and restaurants, tour operators and airlines.

George Onyango with fellow jua kali artisans at his Kamukunji workshop, Nairobi. /FILE
George Onyango with fellow jua kali artisans at his Kamukunji workshop, Nairobi. /FILE

More than 5.9 million jobs have been affected since the first case of Covid-19 was reported in the country, private sector data shows, as the government contemplates re-opening of the economy.

Data compiled by the Kenya Private Sector Alliance(Kepsa), and shared with the government, indicates at least 5,991,768 direct and indirect jobs have either been lost or workers sent home on unpaid leave as companies and businesses mitigate effects of the virus.

This is seven fold the 846,300 new jobs created last year as per the Economic Survey 2020.

 

After the first coronavirus was reported on March 12, the government directed a number of measures among them working from home, cessation of movement and a 7pm–5am curfew, which have affected different sectors of the economy and international trade.

Travel and tourism is the most hit with 3.1 million jobs affected including hotel employees, pubs and restaurants, tour operators, airlines, travel agents and their related suppliers and support services.

About 2.3 million employees are at home on unpaid leave with most hotel employees on 50 per cent pay as most businesses considering redundancies from June onwards, Kepsa notes in its report shared in a meeting chaired by Interior CS Fred Matiang’i last week.

Gender and Youth is the second most affected with 500,000 jobs lost and at high risk across the sectors.

“ Given the inevitability of job losses across sectors,ensure justice and fair treatment of women, youth and PWDs (persons living with disability) during staff layoffs,” the report notes .

At least 450,000 jobs have been lost in construction and real estate, including casual labourers.

“Only 25 per cent of construction sites are operating. Other businesses impacted include real estate agents, valuers, property management and security,” Kepsa, led by CEO Carole Karuga says in the report.

 

The sports, arts and culture sectors has seen 400,000 jobs lost along the value chain. 90 per cent of the sector has been negatively impacted based on the premise that the sector is crowd-based.

 

In the agriculture sector, 350,000 jobs are at risk. At least 200,000 workers have been placed on unpaid leave and impacted directly, Kepsa notes.

The education sector has 320,000 likely job losses with survey indicating 53 per cent of educational institutions reported layoffs with the education sector recording the highest variance of 40 hours between the usual and actual hours worked in a week.

Some jobs have however been created through ICT in the sector; with educational technology which combines the use of computer hardware, software, and educational theory and practice to facilitate learning, creating a huge area of potential growth.

In the manufacturing sector, 30,000 direct jobs have been lost so far due to overall reduction in demand. Between 100,000 and 150,000 additional indirect jobs have also been lost due to closure of other key sectors such as hospitality.

Other affected sectors are public transport(126,768 jobs lost), wholesale and retail (40,000 jobs lost or at high risk) and legal (15,000 practising advocates and 50,000 support staff adversely affected).

Environment, water and natural resources(20,000 jobs lost), healthcare (20,000 jobs at risk) , logistics and transport (10,000 jobs lost with another 10,000 at risk) security (10,000 jobs lost), and the energy and extractive (5,000 job losses in petrol stations).

The sector has also reported 60-70 per cent job losses for small scale miners.

“Overall energy consumption decreasing as the economic activity stops with downstream petroleum down 50 per cent and upstream petroleum existing works continues at slower pace,” the report notes.

Companies continue to write to the Labour Ministry indicating their plans to lay-off, the Federation of Kenya Employers (FKE) notes.

“A number have applied for redundancy, a  huge number have sent employees on leave as they wait and see. Employers are reviewing all options available,” CEO Jacqueline Mugo told the Star in a telephone interview.

National Treasury and Central Bank of Kenya(CBK) have downgraded 2020 GDP growth to 2.5 per cent and 2.3 per cent respectively, from an initial projection of 6.2 per cent.

According to CBK, the country’s growth is expected to worsen in the second quarter of the year (April-June), with the imposition of more stringent travel and transport containment measures, particularly in transport and storage, trade, and accommodation and restaurants.

“As a result, real GDP growth in 2020 could slow to about 2.3 per cent from 5.4 per cent in 2019. Overall, inflation is expected to remain within the target range in the near term,’’ Governor Patrick Njoroge said last Thursday.

The government is considering reducing curfew hours to between to between 9pm and 5am, open inter-county movement on a controlled programme and open up domestic travel including domestic airlines, airports, trains and train stations, buses and tour vehicles.

It also plans to open livestock and produce markets, lift the ban on sporting events, which will be resumed under strict guidelines and reopen education institutions but under high hygiene and heath guidelines.

Social distancing, wearing of masks, sanitising and other measures to reduce exposure and spread of the virus will be observed.

Promotion of online sales, cashless transactions through e-payment platforms and remote working are still encouraged.