Last week I attended an excellent webinar on personal finance management in the time of corona, hosted by one of the local banks. I was surprised to find a large attendance, with at least 1,200 attendees at its peak, which spoke to the relevance of the topic in the current environment.
The key message that came through from many of the speakers was slow down your expenditure and measure your personal runway to ensure you don’t run out of space to keep yourself afloat.
One speaker was very specific: if something doesn’t generate cash for you, and is not related to food or shelter, this is not the time to be thinking of buying it. Most late afternoons, I have now taken to walking for exercise down the beautiful paved footpaths of the recently expanded Ngong Road.
In the approximately three kilometre stretch between the Junction and Prestige Mall, there are tens of used car yards packed with luxury and mainstream cars awaiting new owners but what I often see are solitary security guards and, in a few cases, the odd hopeful salesman waiting to catch that elusive lucky break.
At the risk of using a pathetically small statistical sample, my uneducated conclusion is that folks are already making decisions around unnecessary expenditure in the form of vehicular purchases.
The same Webinar speaker warned attendees against starting and investing their savings in businesses based on a whim without having done the requisite research and feasibility studies on the product or service so desired to be sold. Which led me to ponder over what the hundreds of thousands of Kenyans who have lost their jobs in the last three months must be doing, some trapped in the major cities of Nairobi and Mombasa without the chance to go to their upcountry homes to lay low and take economic cover.
I have opined about the resilience of the Kenyan entrepreneur since we were first hit with the Covid-19 scare in March this year.
On May 18, 2020, I noted information from the Companies Registry that from an average of about 700 private company registrations per week prior to Covid-19, registrations dipped to about 480 when the government announced the partial lockdown in March and were now ticking up to about 550 per week.
Business names, which represent sole proprietorships, moved from an average of about 1,400 per week to a low of about 800 and is now ticking up to about 1,000 sole proprietorship registrations per week.
Progressively, in the week ending June 19, 2020, business names registered were 2,206, a slight increase from the 1,953 registered in the previous week. In that same period, there were 1,141 private companies registered, also a slight increase from the 1,027 registered in the previous week. As you can see, this is a notable increase from the May 2020 numbers I had reported In the same period in June 2019, there were 1,039 business names and 818 private companies registered with no Covid-19 in sight.
Without interviewing the owners of the capital behind these registrations, one can only take an uneducated guess as to what is driving the significantly increased number of business registrations per week especially since we haven’t seen any external interventions in the form of angel investors suddenly floating into the Kenyan entrepreneurial space.
There is clearly an upsurge of interest in opening businesses and, noting the absence of concrete evidence, it is likely that these are previously employed persons who are moving into the entrepreneurial space.
Other anecdotal evidence is found in the number of private car owners now selling fruits and vegetables from the boot of their cars on various roads in Nairobi’s suburbs. Either your traditional mama mboga got a vehicular upgrade in the last three months, or car owning citizens, who are working from home, have found a better way to spend their unsupervised office hours making an extra shilling or two.
Whatever the case, the resilience of the Kenyan spirit has never been so evident.
The challenge is now to ensure the continued commitment to the ease of doing business that our government has demonstrated, not only in the registration of businesses but in finding ways in which these fledgling entrepreneurs can create a marketplace devoid of baffling tax encumbrances and byzantine county administrative licences.