- New company and business registrations dropped in 2021, slamming brakes on a trend that had seen a surge in start-ups.
- The latest data from the Registrar of Companies show that business names and private firms registered dropped by 4.6 percent to 136,633 from 143,152 in 2020.
New company and business registrations dropped in 2021, slamming brakes on a trend that had seen a surge in start-ups as Kenyans, who had lost jobs due to the Covid-19 pandemic, turned to entrepreneurship.
The latest data from the Registrar of Companies show that business names and private firms registered dropped by 4.6 percent to 136,633 from 143,152 in 2020.
Also, the number of new business names registrations declined by four percent to 90,458 from 94,115 in 2020, while private companies dropped by 5.8 percent to 46,175 from 49,037. This comes at a time when the economy has rebounded and many Kenyans are back to work.
The economy has since expanded by 11.9 percent and 9.9 percent in the quarters ending June and September respectively, according to the Kenya National Bureau of Statistics.
The imposed coronavirus-induced lockdown in 2020 had triggered massive layoffs and pay cuts, as Kenyans turned to entrepreneurship after losing their jobs during the pandemic.
Education and tourism firms were the most affected as the majority were forced to close temporarily, forcing their staff to set up their business for alternative incomes.
Other industries affected included sports, arts and creative industry, agricultural, transport and manufacturing sectors.
The closure of corridors of the economy created entrepreneurs, with the majority of registrations rising between July-September 2020, which was characterised by layoffs. In the quarter, business names registered were 29,941 while private companies were 15.681.
The registrations have however subsided with the return to normal operations.
The hotel industry that was the worst hit by the pandemic is now rehiring to match demand and recovery in the sector.
A CEO survey by the Central Bank of Kenya in November stated that the corporate heads reported an uptick in business activity, especially in sales growth and employment of full-time employees in the last quarter of 2021, attributed to the resumption of optimal production.
The business activity this year is expected to mirror an anticipated improved performance in the last quarter of 2021.