Business in the new Normal

Kenyans are a happy lot after President Uhuru Kenyatta lived up to expectations that he removes restrictions imposed to control the spread of Covid19. Society has a chance to rebuild but the easing of restrictions presents mixed fortunes for the people of Taita Taveta county.

The county’s economy depends a lot on tourism and commercial activity along the Nairobi – Mombasa highway, hence the opening up of movement will be create jobs. The resumption of intercity travel will revitalize business in Voi, Maungu, Mackinnon Road and other highway centres. Increase in market activity will increase the revenues collected by the county government.

In April, Mohamed Abubaker, a petroleum dealer in Voi, told the Voi Business Network Magazine that sales of fuel had dropped 50 per cent due to the lockdown of Nairobi and Mombasa. “Restaurant sales went down tremendously by over 85 per cent,” he noted. The resumption of passenger transport between Nairobi and Mombasa will benefit not just Mohamed but also the thousands of other business owners in Taita Taveta county.

Many Kenyans fear that the opening up of Nairobi and Mombasa could spread the Covid19 virus into the rural areas. However, the harsh economic realities mean that Kenyans also want a resumption of normal business. The Federation of Kenya Employers reports that almost 400,000 jobs have been lost since March 2020. The people who had those jobs supported millions of dependents in the rural areas who are currently living without cash remittances from relatives in urban areas.

Now that Kenya is open for movement, what will we see in terms of social and economic developments?

Short-term economic depression
About two-thirds of small and micro enterprises (SMEs) are in danger of closing down. Majority of Kenyans are employed in SMEs most of which have cut down on staff or closed for business. Schools remain closed with private school teachers not getting salaries since March. The large numbers of unemployed workers or employees on unpaid leave will reduce consumer spending in the society. When money gets scarce, consumers concentrate their spending only on basic needs. Predictions show that it will be several months before the economy picks up to pre-Covid19 levels.

Migration of people
There are fears of a massive movement of people from urban areas to the rural areas. However, there are people in the rural areas that will move into urban areas to look for work. There could also be movement of people from one town to another in the search for job opportunities. It is hard to say what society will look like in the next few months but one sure winner will be the public transport industry which will cash in on all the movements.

Some businesses will thrive
“We will always want to travel, to eat out, to be entertained, and to have experiences in person. Just don’t expect any of these activities to be unchanged,” says Mohit Joshi, a consultant. In his outlook for the future, Mohit recommends that businesses adopt resilience and agility, evaluating where they must remain strong and where they must be flexible. “It’s clear that this crisis will cull a lot of outdated practices, yet many more than we might think will continue,” says Mohit.

Low numbers of tourists
Low numbers of tourists is likely to be the new normal for the foreseeable future. The International Air Travel Association, a global body representing airlines, says it could be as far away as 2023 before the number of international passengers rises to 2019 levels. For now, hotels in Kenya will have to do their best to attract domestic tourists. The situation could change after August when international flights are allowed back into Kenya.

The opening up of intercity transport, therefore, represents an opportunity for business to get back on its feet. The last four months have been a dark tunnel for many Kenyans. 6th July marked the first glimmers of light that could get us all out of the mess brought about by the pandemic.

Picture: A matatu terminus in Nairobi. Photo by Sila101

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