Over 20,000 formal jobs in Kenya may be lost this year due to coronavirus
Over 20,000 formal jobs may be lost this year in Kenya due to the coronavirus outbreak.
Economists from NCBA Bank stated that the scale of job losses could hit unprecedented levels in coming months as business activities gradually grind to a halt.
The report further says the informal sector will also see negative growth as demand weakens further with declining incomes.
This as the bank stated that not only will it extend the 12-month grace period for business during this time, but also extend the grace period if businesses can prove that they are still suffering from the aftermath of the COVID-19 .
According to the latest data from the Kenya National Bureau of Statistics, more than four million of Kenya’s youth who are eligible for work have no jobs.
But the situation could get worse with the current COVID-19 pandemic turning the economy on its head.
Economists from NCBA bank have projected that more than 20,000 formal jobs could be lost during this period.
The report attributes this to a weaker private sector that will be largely affected, which is expected to have a huge impact on the informal sector as well.
The report further states that economic activity could decline in 2020 should the coronavirus pandemic persist through the second quarter.
GDP growth could decelerate sharply to 2.3% in 2020, a sharp downgrade from our 5.7% projection in January 2020.
“2020 was expected to be relatively better than 2019 with projections of 5.7% -but with the recent happenings it could be more like 2.3% or even below,” said Kwame Owino, Institute of Economic Affairs CEO.
CBK Governor Patrick Njoroge recently announced that commercial banks have started heeding to the call by negotiating with their clients on repayment extensions on their loans.
NCBA through its managing director John Gachora stated that the bank will extend loans repayments by up to 12 months for businesses with a possibility of further extension.
“We can negotiate with our customers to ensure that there are no NPLs in our books. We can go further than the suggested 12 months to make this period that more bearable for our customers,” said John Gachora, the Managing Director NCBA.
Standard Chartered Bank is also negotiating with its customers on easier loan repayment modes.