OPINION: The seismic economic effects of coronavirus

OPINION: The seismic economic effects of coronavirus

Every day, the Ministry of Health provides us with COVID-19 statistics detailing new cases and deaths.

For many of us this exercise has even become academic and while we follow the drift we have largely tuned out. And this is part of the problem.

We largely look at COVID-19 as a health issue but this virus is not that one dimensional; it is much more diabolical. The coronavirus has upended every sector, category, industry and demographic of our society and economy. There is no one who has not felt the weight of its punch or the force of its kick.

COVID-19 has had the socio-economic impact of an earthquake and a tsunami put together; but in this case, the earth does not stop moving and the tides do not recede.

Airports became parking lots; millions of children were forced to stay at home with their parents; businesses of every size and across all sectors are struggling or struggling to adjust and millions of people are staring at empty pockets with weary minds and anxious minds; praying that the end of this affliction is close.

Even with the remarkable news that vaccines are now being distributed across the country, we still have several years to go before we can begin to see and feel the impact in our society and economy.

‘New normal’

People talk of a ‘new normal’ but there is nothing normal about the destruction COVID-19 is leaving in its wake. Perhaps it is just as well that our updates focus on health. If we were to receive an honest socio-economic update on the coronavirus, the numbers would only nudge us towards us despair and a collective depression.

The truth is we do not need numbers to map out the socio-economic debris of the coronavirus. All of us know of people and or groups of people whose stories and or circumstances tell the economic story better than any government update ever could.

All across the country landlords are staring at vacant units previously occupied by productive individuals who have chosen to go to their homes in the countryside and wait out the virus there without the burden of rent arrears.

My neighbor’s 24-year-old daughter got her first entry level job in January this year; in August she was shown the exit.The stories of retrenchment are everywhere and have impacted almost every family in the country.

Kenya’s unemployment has doubled from the beginning of the year with almost a million citizens losing their jobs since March 2020 shrinking the number of those in employment from 17.8 million to 15.8 million.

I was surprised to learn that retrenchment affects even those who are not axed. A worker who survived the axe in one company is having trouble sleeping weeks later, primarily because he does not understand why he survived or for how long he will last.

But to really understand the true economic devastation of COVID-19 we have to look at the biggest group of people in the economy-low income workers.

According to the Kenya National Bureau of Statistics report from last year, over 1.2million Kenyans (46.3 percent of the total salaried workers in the country) earn less than Ksh. 30,000 a month.

The KNBS report notes that these salaries especially in urban areas are unsustainable because of the high costs of living and the Ksh. 30,000 is a gross amount before income tax and statutory deductions.

These are the workers on the front line of the economic crisis wrought by COVID-19, the first ones on the line for retrenchment. And almost all of these individuals are in the private sector working in hospitality and tourism, manufacturing, commercial services, education and IT.

Vulnerable Kenyans

Albert, a 32-year-old who worked as a bouncer for a popular local club, was laid off when the dusk to dawn curfew began. His life trajectory since then is probably a mirror for hundreds of thousands of others. As a result of the job loss, Albert was unable to pay rent and his landlord kicked him out of his house in Kayole.

Albert Otieno and his son sharing a meal at home. PHOTO | COURTESY | OXFAM
Albert Otieno and his son sharing a meal at home. PHOTO | COURTESY | OXFAM


He moved with his with his children (his wife left him, she could not consider living in the single room) and cousin into his mother’s one-room house also in Kayole. But they are still struggling to find food to eat and money for rent: as of this month, they owe the landlord Ksh.18,000 having defaulted for four months.

Through the Nyumba Kumi policing initiative, Albert met Chairman Geoffrey Kamau who told him about a cash transfer program that offers monetary support for vulnerable Kenyans. After several assessments, his application for assistance was approved and he is set to receive Ksh. 7,780 for three months.

The program is an initiative of a consortium of NGOs — Oxfam Kenya, The Kenya Red Cross Society, Concern Worldwide, ACTED, IMPACT, the Centre for Rights Education and Awareness (CREAW) and the Wangu Kanja Foundation — and is funded by the European Union.

It supports cash transfers to vulnerable families in Nairobi using Safaricom’s mobile money platform: M-Pesa.  So far, the consortium has transferred Ksh. 326,734,040 to 16,411 vulnerable families.

Beatrice sitting by the roadside in Kileleshwa with other women waiting for domestic work in May 2020. PHOTO | COURTESY | OXFAM
Beatrice sitting by the roadside in Kileleshwa with other women waiting for domestic work in May 2020. PHOTO | COURTESY | OXFAM


38-year-old Beatrice Achungo Mbendo is also a recipient of the cash transfer program. She recently gave birth to a baby boy and lives with her four children in Muthurwa. Before COVID-19, Beatrice worked as a cleaning lady. However, the jobs that she once looked forward to are no longer available.

Beatrice says when she was pregnant, she would sit on a stone waiting for hours on end for her clients to call her but her phone remained silent. According to her, some feared being exposed to coronavirus while others lost their jobs and could no longer afford to have her clean for them. Often times she has been forced to send her children to Muthurwa Market to look for left-over food so that they don’t sleep hungry.

Unemployed before the pandemic

Lastly, there is another group, a largely forgotten one but perhaps those most affected by COVID-19: those who were unemployed before the pandemic.

According to the KNBS, there were just over a million Kenyans actively seeking employment in March and millions others (just over 6 million) who it just classified as inactive.

Their stories are harrowing. The opportunities that were difficult to find before Corona are now even more so with the virus in play. There are hundreds of stories of job offers withdrawn at the last second, revoked appointment letters and contracts that remain unsigned.

Yes, coronavirus is first of all a deadly public health crisis but it is not just taking lives, it’s gobbling up livelihoods especially those who earn the least and those who earn nothing.

If there is a new normal it must be how to get these millions of people back into the economy in a sustainable way.

Rachel Ombaka is a sub-editor at Citizen TV Digital and an optimistic humanist