Economic storm clouds are gathering fast. The Government is stepping in with knee-jerk reactions but the fear that crisis prevention won’t be sufficient is written on the faces of many bread winners.
For Jairus Alwang’a, a father of three, this could not have come at a worse time. He was sacked within the first month of Kenya reporting the first case of the disruptive coronavirus.
His employer lost his job and had to send Mr Alwang’a packing. The employer has taken up the very job that he had given to Mr Alwang’a.
Mr Alwang’a, who was working as a driver, helping to deliver goods to people making online orders, is now jobless, scared and cooped up in Nairobi as the Government tries to contain the spread of Covid-19.
“It is very tough. Making distress calls every day to look for food is dehumanising. I did not just lose my job. It is like I have also lost my dignity,” says Mr Alwang’a.
Worse still, he is locked up in the city and must pay rent, a tall order for a person already struggling to get food. If the Government was to open up the city and he gets money, he would take the next bus to his rural home.
He represents the now rising number of Kenyan workers who are stuck between a rock and a hard place. They have lost work. They cannot meet their daily needs. Yet, they cannot be allowed out of the city.
The situation looks set to worsen with the Ministry of Health projecting that Covid-19 cases could jump to over 200 new confirmed infections per day come August.
A survey conducted by the Kenya National Bureau of Statistics (KNBS) early this month on the impact of Covid-19 on households and individuals showed that about a third (30.5 percent) of Kenyans struggled to pay rent in April.
“The main reason for the households’ inability to pay rent for the month of April 2020 was the reduced income/earnings,” reads the May report which surveyed 15,840 respondents via phone.
The situation has worsened for many tenants. Media is replete with tales of landlords who are evicting tenants as others pull out doors and roofs to force tenants to pay up.
Fear has only made the situation worse even as the few people willing to offer household chores to distressed job seekers avoid to do so in the spirit of lowering risks of coronavirus infections.
Many companies have cut jobs while others have sent workers on unpaid leave. Sectors such as aviation, hospitality and media are among the worst hit as a result of government directives such as curfew and lockdown of towns and estates.
For Job, whose real name we have withheld to honour his request for anonymity, the year is but lost and uncertainty hangs over his future.
He has been working as an accountant in a bar and restaurant in Buruburu, Nairobi for the last three years. He was in the middle of reconciling the day’s sale with cash received when the Government made the announcement to close bars and restaurants.
“We were told to go home until further notice. It took me almost a week to accept that it meant I had no work,” recalls Job in a phone interview.
He moved from a bedsitter to a single room at the end of the month to cut costs. He then travelled to his rural home in mid-April hoping the State order would not last for long.
He is now stuck there while rent piles up in Nairobi. Unfortunately, he cannot access the city and remove his belongings from the house.
While Mr Alwang’a wishes to be in his rural home, Job wishes he was in Nairobi. They are both seeking ways to bring down their costs.
The first case of coronavirus in Kenya was reported on March 13 and infections crossed the 1,000 mark on May 20, a key concern being community infections.
A report tabled in Parliament by the Ministry of Labour and Social Protection at the end of April showed that 133,657 formal jobs had been lost as a result of Covid-19. Many more had been lost in the informal sector.
The report cited transport, aviation, hospitality and tourism, manufacturing, wholesale trade and agriculture as the most affected sectors.
“The numbers are likely to rise because most companies are yet to notify the ministry of redundancies as required under the Employment Act, 2017,” read the report.
President Uhuru Kenyatta had sent a warning in his Labour Day address that over 500,000 jobs were at stake should government intervention measures fail to bear fruit.
He said many businesses had closed down abruptly, working hours reduced and many opportunities lost, which translated into job losses.
“We cannot relax in our efforts to conquer this invisible enemy and put our economy on a strong growth path because, if we do, we could lose upwards of half a million jobs over the next six months,” said President Uhuru Kenyatta.
The Government has waived Pay as You Earn (PAYE) tax for workers earning up to Sh24,000 a month and lowered higher tax bracket from 30 percent to 25 percent.
However, Nikhil Hira, a director at Bowmans (Coulson Harney LLP) law firm says the job losses mean the impact is going to be low.
“Sacked people cannot enjoy the PAYE reductions. The continued job cuts look set to water down this stimulus package,” says Mr Hira.
The agony of Kenyans extends to those who were working abroad. Countries such as the United Arabs Emirates (UAE) have sent many workers on unpaid leave for ununspecified period of time as the country implements lockdown measures.
For Beldene Inzieu, a Kenyan working in Dubai, the situation is getting dire. She is on the second month of unpaid leave and that has meant surviving on the small savings she had made.
“The worst bit is that I am miles away from home and can no longer meet fellow Kenyans for solace in places such as church as we used to,” she says.
She is now finding it difficult to send money home.
The Central Bank of Kenya (CBK) expects diaspora remittances to dip in coming months owing to job losses and salary cuts from the many Kenyans living abroad.
Dubai firms are feeling the damage, just as in Nairobi or anywhere else in the world, weakening prospects of people returning to work soon.
About 70 percent of businesses in Dubai expect to close their doors within the next six months as the Covid-19 and global lockdowns ravage demand, an April survey by the Dubai Chamber of Commerce revealed.
Dubai, UAE’s commercial and tourism hub, imposed a strict 24-hour lockdown on its population of 3.3 million beginning early April and this has hurt demand, leading to job losses.
Back to Kenya, returning the economy to a growth of above five percent will not be a walk in the park. The CBK projects the economy to grow at 3.4 percent, the slowest pace in 12 years.
This is a ambitious projection when contrasted with National Treasury’s estimation (2.5 percent) and World Bank’s 1.5 percent.
The World Bank warned that a more severe global recession would hit Kenya’s export demand, tourism earnings and remittances, while weather-related shocks and a widening fiscal deficit could also present more downward risks.
The job market outlook looks grim for fresh college leavers who will now have to battle out with a high number of experienced job seekers rendered jobless by coronavirus.
Economic Survey 2020 released by KNBS showed the private sector created 46,100 formal sector jobs in 2019 compared to 57,600 jobs a year earlier.
This is the lowest in at least seven years when compared with 106,200 formal sector jobs in 2013.
Overall, the economy is yet to hit at least 1 million jobs a year as had been promised by President Kenyatta administration.
Total new jobs generated in the economy last year were 846,300 in contrast with 840,600 jobs a year earlier. Most jobs come from the informal sector, whose demand for workforce keeps see-sawing.
The Covid-19 pandemic is the latest see-saw for workers such as Alwang’a and Job and they can only hope that the Government finds a solution fast before the economic storm it is wreaking on their lives sweeps them away.