Do more to maintain the pace of economic recovery

Crowded view of Tom Mboya Street in Nairobi. [Jenipher Wachie, Standard]

In the midst of the doom and gloom that the difficult times brought with them, a glimmer of hope came yesterday from an employment report by the Kenyan Statistics Office (KNBS).

KNBS’s quarterly labor force report showed that by the end of March, more than 2.1 million Kenyans who were unemployed at the height of the Covid-19 pandemic had found jobs by the end of March.

At the end of March this year, 2,495,541 Kenyans of working age between 15 and 64 were unemployed. That’s almost half of the 4,637,164 Kenyans who were unemployed at the end of September last year. This is a story of economic recovery. And it’s inspiring.

There is hope that an economy that has been hit hard by the negative effects of the pandemic will finally look up.

But it is not yet time for Kenyans – and especially politicians – to show off champagne. The economy has not yet got out of hand.

The early political campaigns, in which many forecasters, including the Central Bank of Kenya and the National Treasury, revised down their growth forecasts for the next year, are not contributing to the recovery process.

It is common knowledge that the political season and economic health in this country are no bedfellows as nervous investors hibernate during the campaign period.

The political rallies that could become superspreaders are taking place at a time when the vaccination program, with only 2.7 million Kenyans vaccinated, is a long way off.

The planes may have flown in the sky, but they are not bringing tourists back to the country they were used to before the pandemic. That means the aviation and hotel industries are still under their weight.

Tens of thousands of Kenyans who made their living in restaurants and entertainment venues are still struggling to get the food to the table. What the numbers from KNBS don’t tell us is the value of the jobs created. Do people earn enough to pay for health insurance and live in decent homes?

The answer, if one can orientate oneself on the numbers of the business test 2021, is no. The number of Kenyans with permanent employment fell by a tenth, namely 187,300 to 2,741,100, as many companies laid off their employees in order to stay afloat.

Lending to the private sector is increasing, but many SMEs, the engine of the economy, have yet to gain a foothold as the flow of credit to SMEs falls by a trickle. Lending to SMEs is vital to the recovery of the economy. However, the cost of borrowing is still prohibitive for small businesses.

Meanwhile, many Kenyans struggle with the high cost of living as food and fuel prices soar.

The government must keep the cost of living in check, support troubled businesses and resolutely prevent super-spread events while stepping up vaccination if we are to stay on the growth path.

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