Due to the measures to combat the novel coronavirus in Kenya, 92 percent of Nairobi county’s low-income residents have suffered the hit, forcing them to cut back on essential purchases, a survey by Tifa Research has revealed.
The survey revealed the reality that the economic impact of the lockdown and the closure of business restrictions have had on the capital’s most vulnerable populace. Residents who reported reduced income are made up of those who lost their jobs, also including the underemployed and the unemployed, caused by the restrictions.
“In terms of the nature of such changes, its main impact has clearly been economic,” the report by Tifa Managing Director Maggie Ireri states. Out of the residents who are currently earning, 96 percent said they were earning less than their incomes before the crisis.
The impact of the restrictions has forced two-thirds of the respondents to reduce their spending on food and non-alcoholic drinks. The report also shows that many residents have been deprived of food in what is the “most immediate impact of the virus” on the poor citizens of Nairobi.
While the most essential necessity has been affected, spending on clothing has also dropped by 22 percent, transportation (19 percent), rent (18 percent), and entertainment or socializing (9 percent). This forms part of the general reduction in consumer spending and private sector investment that is expected to affect economic growth in the short term.
The latest prediction by the World Bank reveals that economic growth is expected to drop to 1.5 percent this year and contract 1 percent in the worst-case scenario under the impact of the coronavirus pandemic.
So far, Kenya has reported 887 positive cases of the coronavirus, with 50 deaths and 313 recoveries. The government has since suspended commercial flights in and out of the country, imposed a curfew and banned public gatherings to halt the spread of deadly the disease.
Kenya has also shut its borders with Tanzania and Somalia, as well as halted movement in and out of the five counties most affected by the virus, including Nairobi and Mombasa, all of which have led to a reduction in economic activity.
The Tifa survey further shows the huge gap in meeting the needs of low-income Nairobi dwellers affected by the restrictions. Recently, thousands of people who marched to collect food aid were injured during a brief stampede in Kenya’s capital.
The government had said it will disburse Ksh8 billion to the most vulnerable households but the criteria and the number of beneficiaries are yet to be disclosed. While authorities are yet to announce direct cash benefits to citizens who have lost their incomes, they have implemented income tax cuts for those employed in the formal sector.
More so, the crisis has hurt the ability of low-income households to save for the future, forcing many of them to sell assets. According to the survey, only six percent of the respondents said they can save money now while those that could save cash before the crisis represented 77 percent of those sampled.
By Ahmed Iyanda.