Unity for Revival-SMEs shoulder with KNCCI for full economic recovery
Around the world, government leaders at every level are devising and, in some instances, implementing plans to fully reopen their economies. While specific guidelines and milestones vary widely, the fundamental challenge is the same from one region to another-How to protect lives and public health while reinvigorating economic growth and employment. In a span of one
year over 4.1 million Kenyans have lost their jobs, due to the stringent measures outlined by the government aiming to fight Covid-19. SMEs in Mombasa demand the executive to fully activate the economic recovery in order to pay back the lost extremes as they fight the pandemic.
Impact of Coronavirus on the global economy.
Coronavirus, is not only a global pandemic and public health crisis; it has also severely affected the global economy and financial markets. Significant reductions in income, a rise in unemployment, and disruptions in the transportation, service, and manufacturing industries are among the consequences of the disease mitigation measures that have been implemented in many countries. It has become clear that most governments in the world underestimated the risks of rapid COVID-19 spread and were mostly reactive in their crisis response. As disease outbreaks are not likely to disappear in the near future, proactive international actions are required to not only save lives but also protect economic prosperity.
On March 11, 2020, the World Health Organization (WHO) characterized COVID-19 as a pandemic, pointing to over 3 million cases and 207,973 deaths in 213 countries and territories.
Significant economic impact has already occurred across the globe due to reduced productivity, loss of life, business closures, trade disruption, and decimation of the tourism industry. COVID-19 may be that a “wake-up” call for global leaders to intensify cooperation on epidemic preparedness and provide the necessary financing for international collective action. There has
been ample information on the expected economic and health costs of infectious disease outbreaks, but the world has failed to adequately invest in preventive and preparedness measures to mitigate the risks of large epidemics.
With globalization, urbanization, and environmental change, infectious disease outbreaks and epidemics have become global threats requiring a collective response. Although the majority of developed countries, predominantly European and North American, have strong real-time surveillance and health systems to manage infectious disease spread, improvements in public health capacity in low-income and high-risk countries such as Kenya—including human and animal surveillance, workforce preparedness, and strengthening laboratory resources—need to be supported by using national resources supplemented with international donor funding. International collective action among governments, non-government organizations, and private companies has been advocated in building and financing technological platforms to accelerate the research on and development response to new pathogens with epidemic potential. In the case of COVID-19, such cooperation is critical, especially for the development and production of a vaccine.
In Kenya, the stability of the economy was threatened at an early stage. Government reactions to contain the disease caused a huge ripple effect to both macro and micro economic enterprises. Lockdowns, curfews, punitive transport regularities among others created an imbalance in the economy where most people had to lose jobs and fall back into SMEs for survival. According to statistics from the Kenya National Chamber of commerce (KNCCI), it’s estimated that about 4.1 million Kenyans lost their jobs in the wake of the pandemic last year. The resurgent shock made many people to choose menial jobs and some resort on opening their own businesses from the little savings they had had before job losses. However, it wasn’t clear on how the disease
would behave, the government through the ministry of health issued a public gathering notice on maintaining social distance, and this ripple effect meandered all the way to schools, entertainment zones, public places, and churches among many other places where people interact. This economic scenario has been rolling over and over again for one year and some months, and as felt evidently in the market atmosphere SMEs and other key players have been suffering from sluggish economic performances.
The Covid-19 Crisis in Kenya
Lately the country has been experiencing a fourth deadly wave from the Delta virus. On July 2021, MoH registered the highest positivity rate of about 18pc as most regions in Western Kenya, were locked down on some merits of economic freedom.
According to KNCCI, although the number of Covid-19 cases and fatalities might still appear comparatively low in Kenya than other world regions, the looming health shock of Covid-19 could have disastrous impacts on the country’s already strained health systems, and quickly turn into a social and economic emergency. SMEs and stakeholders in the economy, including
KNCCI are calling on the government to reinstate the reopening of the economy so that it can cater for the imbalance trying to build up slowly by the rising figures.
In a proposition to the government, they advise that, on the health front, greater capacities to test, protect, cure and treat are essential. On the socio-economic front, policy measures should cushion income and job losses, while tracking the specific challenges of high informality.
“Beyond the immediate response, Kenya’s recovery strategies should include a strong structural component to reduce dependence on external financial flows and global markets, and develop more value-adding, knowledge-intensive and industrialized economies, underpinned by a more competitive and efficient services sector,” noted a press report by the KNCCI. While most of the key sectors in the economy are wailing of the Covid-19 pandemic the Logistics and supply chain sector, one of the epitome in Mombasa has been on the Intensive care unit for the worst eras of time. Being a hub of exports and imports the region in the entire east Africa enjoyed vast revenue collection for the nation in a wholesome. SMEs have pointed out that in Mombasa, to be specific, some of the entertainment spots frequently visited by local patrons and tourist might never reopen again, a bad side of the economy. Long distance public transport companies have got a reprieve by being allowed to operate full capacity although they are not yet out of the woods since the curfew is still in force and they can only operate within restricted hours.
As the spread of the virus is likely to continue disrupting economic activity and negatively impact manufacturing and service industries, especially in developed countries Kenya being one of them, we expect that financial markets will continue to be volatile. There is still a question as to whether this unfolding crisis will have a lasting structural impact on the global economy or largely short-term financial and economic consequences.
In either case, it is evident that diseases such as COVID-19 has the potential to inflict severe economic and financial costs on regional and global economies. Because of high transportation connectivity, globalization, and economic interconnectedness, it has been extremely difficult and costly to contain the virus and mitigate the importation risks once the disease started to spread in multiple locations. This warrants international collective action and global investment in vaccine development and distribution, as well as preventive measures including capacity building in real-time surveillance and the development of contact tracing capabilities at the national and international levels. As outbreaks of novel infections are not
likely to disappear in the near future, proactive international actions are required not only to save lives but also to protect economic prosperity.
Government’s position in the economy.
Mvita Member of parliament, Hon. Abdulswamad Shariff Nassir has been noted on several occasions pushing for full economic recovery. Speaking at KNCCI offices, at the moment of press report release, he urged the government understand the pleas of the SME sector who have been pulling strings to ensure the cornerstone of the Kenyan economy stands abreast.
“We are pushing for a bill in the parliament that would see the economy reopened,” said Hon. Abdulswamad.
According to him, it was unnecessary for the government to block local products from circulation while the economy need to grow. By opening up the economy, he said that it would enable everyone in every sector to fully utilize the time and place as they take care of their health since they understand now the precautions of not protecting themselves. KNCCI urged the
president to consider a full reopening of the critical sectors of the economy in order to allow for businesses to recover as we move into the fourth quarter of 2021.
“He should revise the directive by government issued last year restricting public gatherings and processions to curb covid-19 following the high court ruling which termed it as illegal and unconstitutional,” said the press report by KNCCI.
By stepping up the vaccination camping and sensitizing the general public to fully vaccinated just like in China, Denmark, Germany, Switzerland and New Zealand would be of the best advantage to the country’s economic growth and protection of the vulnerable SMEs.