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Wednesday, December 8, 2021

The impact of covid-19 on small businesses in Kenya

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The coronavirus (COVID-19) pandemic has affected the world and like most countries, Kenya has felt the effects too.

In Kenya, MSMEs are the engines of growth and play a key role in the country’s economic development.

The sector contributes about 80 per cent of employment and is crucial in reducing poverty, stimulating entrepreneurship and promoting innovation for achieving the SDGs.

How did we get here?

COVID-19 is caused by infection with the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) virus strain. The virus affects different people in different ways. Most infected people will develop mild to moderate illness and recover without hospitalization.

The virus is transmitted via the respiratory route when people inhale droplets and small airborne particles that infected people breathe out as they breathe, talk, cough, sneeze, or sing

Due to the high rate of transmission, on Friday, March 13th, 2020 the Government of Kenya announced containment and treatment protocols for the virus.

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Empty streets in Nairobi after lockdown
  1. The Government suspended travel for all persons coming into Kenya from any country
  2. Learning in all education institutions was suspended with immediate effect.
  3. Government offices, businesses and companies were encouraged to allow employees to work from home, with the exception of employees working in critical or essential services.
  4. The government encourage the use of cashless transactions such as mobile money and credit cards to reduce transmission.
  5. Among other neasures.

These turn of events affected Kenya’s international trade performance, its financial and commodity markets, and the entire macroeconomic environment have all been affected. 

Small businesses too have been affected causing many to minimise operations or shut down entirely.

Innovation and resilience

But, as time went by, tens of small scall businesspeople across the major towns that include Nakuru, Kisumu and Mombasa embraced new ways of survival. For instance, the car boot sale model turned into a craze during the pandemic.

Car-boot market thrives during pandemic
Traders selling groceries using the boot sales model
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Kenyans also found business opportunities in making sanitisers at home while tailors turned to stitch masks for survival.

They stitched and produced masks out of locally available cloth then sold them out to communities at a reduced price to make a living and at the same time protect them from the deadly virus.

MSMEs started to prioritise innovation as a key survival, recovery and growth strategy since Covid-19 would be around for a while.

For example, owners of restaurants have come up with ways of maintaining social distance and adhering to hygiene protocols. The strategic goal here is increasing the number of guests who are convinced it is a safe place where one can regularly dine during this time, hence more income for the owners.

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“Just as good leaders may be born out of a crisis, so are entrepreneurs. In Kenya, the COVID-19 pandemic has disrupted lives including some people losing jobs and they are turning to businesses which heralds a brighter future since after the disease is contained, a majority will retain the ventures as they go back to their jobs and employ people”, said Ernest Manuyo, a lecturer at Pioneer Institute in Nairobi.

Intervention

The public and private sectors players should now come in to help small business back on their feet.

“Most of us who operate small businesses are starting from scratch and only the government can help us recoup. We not only need financing but information through training besides subsidies and reduction of taxes,” said Charles Kimani who produces Khaki packaging bags.

Kimani’s sentiments are echoed by Mary Wangari, a fruit vendor who insists that the government has a major stake in boosting the economic transformation of its people by offering the right environment for businesses to thrive.

“We are ready to get back to business if the government also gets serious on helping us get there. Kenya is a country whose economy can grow very fast with a conducive environment,” she said.

In sum, the pandemic caused an unforeseen impact on small businesses, many losing their jobs and closing down their hustles, but innovation and creativity have turnaround the situation now businesses finding new ways to survive and operate.

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