REALITY CHECK

Life after lockdown lifting: New normal, old normal?

Many are wondering about the immediate economic prospects supposing Covid-19 restrictions are significantly relaxed

In Summary

• History of resilience gives hope that mankind will bounce back, but to what reality?

City of Nairobi
City of Nairobi
Image: FILE

There are strong indications that Kenya’s partial lockdown might be relaxed tomorrow, but social and economic changes of the past three months raise questions over whether we will revert to our old lives or emerge into a ‘new normal’.

The first official indication that the night curfew and movement restrictions could be relaxed was a statement by Transport CS James Macharia that national carrier Kenya Airways will resume flights on June 8. The date is significant because it comes just two days after the expiry of the ongoing partial lockdown that was extended for 21 days by President Uhuru Kenyatta on May 16.

 

“We expect Kenya Airways to fly from June 8 subject to medical protocols,” the CS told the Star recently.

 
 
 

There is also the fact that many countries that had gone into full or partial lockdown are loosening the restrictions imposed to control the spread of Covid-19. It is highly unlikely that Kenya would maintain its own containment measures contrary to a worldwide trend towards opening up for business.

Tanzania did not impose any restrictions on its people. Uganda, Rwanda, South Africa, Ghana, India, the United States, the United Kingdom and many more countries are easing the lockdowns. Most of Europe is opening up, with football matches already resuming across central and eastern Europe.

Though apprehensive about the spread of the pandemic, economic necessities mean that many Kenyans are looking forward to lifting of the night curfew and easing up of movement restrictions so normal business activity can resume.

Bars, hotels and cafes are closed across the country. Places of worship and schools have been shut for over two months. Social activities have suffered and individuals that made a living from music and the arts have been hard hit. It is now necessary to get a government permit to move from Nairobi or Mombasa to the rest of the country, something Kenyans have not experienced since the Mau Mau emergency.

The Federation of Kenya Employers reports that almost 400,000 jobs have been lost in the past two months. Those individuals in turn supported millions of dependants. President Uhuru Kenyatta has warned that Kenya could lose half a million jobs by the end of 2020. The President subsequently unveiled a raft of actions the government hopes will stimulate the economy.

Supposing Covid-19 restrictions are significantly relaxed, what are the immediate economic prospects for Kenyans?

Short-term economic depression

 
 

Central Bank Governor Patrick Njoroge estimates that about two-thirds of small and micro enterprises are in danger of closing down by June. Most Kenyans are employed in SMEs, most of which have cut down on staff or closed for business. The large numbers of unemployed workers or employees on unpaid leave is likely to result in depressed consumer spending due to the lack of disposable income.

When money gets scarce, consumers concentrate their spending only on the basic needs. Predictions show that even if the night curfew and cessation of movement are removed on June 6, it will be several months before the economy picks up to pre-Covid-19 levels.

 

Few international tourists

“If the curfew is lifted, the tourists won’t start coming right away because there are no international flights,” says Simon Kuria, a boda boda operator at the coast. Kuria has seen his earnings take a beating because there are fewer people to carry and also because operating hours were reduced by the night curfew.

Hotels remain shut, with tens of thousands of workers already sent home. The latest shock announcement was the closure of the iconic Norfolk Hotel in Nairobi. The hotel had been running for more than 100 years and is famous for hosting the likes of Lord Delamere, one of the pioneer British settlers in East Africa. The famous Salt Lick Lodge in Tsavo West National Park is yet another notable tourist establishment that was closed indefinitely.

Low numbers of tourist arrivals is likely to be the new normal for the foreseeable future. The International Air Travel Association, a global body representing airlines, says it could be as far away as 2023 before the number of passengers rises to 2019 levels.

Remote working opportunities

The shift to remote working, or what is described as, “working from home,” presents a mixed bag of fortunes to countries such as Kenya. The International Labour Organization sees new opportunities in remote working services for developing countries, but only those with the necessary ICT infrastructure. Outsourcing opportunities exist in software development, engineering and financial services, but these will take time to mature. The ILO warns that growth in remote working opportunities, could, however be reversed by countries wanting to bring jobs back home.

The old normal?

“We will always want to travel, to eat out, to be entertained and to have experiences in person. Just don’t expect any of these activities to be unchanged,” says Mohit Joshi, head of consulting firm Infosys.

In his outlook for the World Economic Forum, Mohit recommends that businesses adopt resilience and agility, evaluating where they must remain strong and where they must be flexible.  

“It’s clear that this crisis will cull a lot of outdated practices, yet many more than we might think will continue,” says Mohit.

Society has survived many crises, from natural disasters, war, economic collapse and previous pandemics that ravaged the earth. Each time, human beings bounced back with greater resilience and more efficient systems that helped spread economic opportunities to a greater number of people.

There is no reason to believe that the ongoing pandemic could be any different.

Edited by T Jalio