Over 5 million Kenyans in informal sector lost their jobs last year due to COVID-19


Over 5 million Kenyans in informal sector lost their jobs last year due to COVID-19
FKE Executive Director Jacqueline Mugo addresses the press on September 25, 2020. PHOTO / COURTESY

In Summary

  • The job losses have been generated from extrapolated results of a micro, small and medium enterprises (MSME) study carried out in the counties of Kilifi, Busia and Kitui and whose results were published Friday.
  • The 223 micro-enterprises involved in the survey noted their number of staff had shrunk from 562 before the pandemic to 370, symbolizing the 34 per cent decrease in the sector jobs.
  • Moreover, the pandemic hit out at the availability of internships for young graduates and students to further impact job creation.

An estimated 5.1 million Kenyans in the informal sector lost their jobs between March and August last year according to a new survey by the Federation of Kenya Employers (FKE).

The job losses represent about 34 per cent of all jobs in the informal sector which when combined round off to 15.1 million according to data from the 2020 Economic Survey by the Kenya National Bureau of Statistics (KNBS).

The job losses have been generated from extrapolated results of a micro, small and medium enterprises (MSME) study carried out in the counties of Kilifi, Busia and Kitui and whose results were published Friday.

The 223 micro-enterprises involved in the survey noted their number of staff had shrunk from 562 before the pandemic to 370, symbolizing the 34 per cent decrease in the sector jobs.

FKE Executive Director Jacqueline Mugo said the study illustrates the landmark effects of the pandemic on, not just jobs, but also livelihoods.

“It means that COVID-19 did not only stop the creation of jobs in the micro-enterprises, but it also wiped out jobs,” she said.

Moreover, the pandemic hit the availability of internships for young graduates and students to further impact job creation.

For instance, the 233 micro-enterprises said they cut their number of apprentices from 1,048 to 541 after the emergence of the pandemic marking a 48 per cent drop in internship roles.

“This has great implications on the future of youth employment in this country and the future work done by the youth,” added Mrs. Mugo.

The operations of the micro-enterprises was greatly impacted by a reduction in the number of customers and truncated incomes.

Other highlighted effects of the impact of COVID-19 on operations include loss of income, high input costs, and non-performing loans (non-debt remittance).

Additional effects include low input supply, limited access to markets and low productivity.

Welding, hairdressing, carpentry and tailoring were the main business activities highlighted by the enterprises in the survey period.

The FKE has appealed for a supportive fiscal policy by government to support the restoration of jobs in the informal sector.

“We appeal to the government to prioritize business recovery in its fiscal policy. The situation of households and enterprises at all levels is getting worse and active direct government intervention through accommodating tax policy will go a long way in getting the households and enterprises back on their feet,” said Jacqueline Mugo.

In 2019, the informal sector contributed to 82.9 per cent of all jobs in the country according to data from KNBS.

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