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KISII COVID IMPACT STUDY
1. BACKGROUND The impact of Covid-19 has been real and devastating in Kenya. The pandemic has significantly impacted all aspects of life such as health, institutional revenues and livelihoods. Covid-19 has hit the most vulnerable the hardest, particularly in densely populated informal settlements and slums, as well as other people lacking access to adequate housing and basic services. The informal economy employing the vast majority of Kenyans1 has been drastically affected as lock-downs and curfews were introduced to curb the transmission of the virus. According to the 2020 Economic Survey, some 83% of employment in Kenya is in the informal sector2 . This is a diverse and burgeoning sector generating significant income covering from transportation to roadside sellers, small scale restaurants and other ventures. It is also a sector characterised by low skills, lacking formal structure and dominated by young persons and women. The typology presented below showcases the varying levels of vulnerability within the sector based on employment and consumption patterns across Africa 3. It is also a representation of the sector in Kenya 1 World Bank (2016) Informal Enterprise in Kenya, available at: http://documents1.worldbank.org/curated/ en/262361468914023771/pdf/106986-WP-P151793-PUBLIC-Box. pdf. 2 World Bank (2020) Commodities Price Data (The Pink Sheet). 3 United Nations (2020) Policy Brief: The Impact of COVID-19 on Women, available at: https://www.un.org/sites/un2.un.org/files/ policy_brief_on_covid_impact_on_women_9_april_2020.pdf.
and indicates the ability of households and low wage earners to cope financially with the disruption from Covid-19 restrictions. Under normal circumstances the sector is severely constrained by lack of access to finance for development. This in itself has a significant impact on their capacity to absorb economic shocks. Covid-19 restrictions meant that employees lacked the option to work from home as they are mostly in the service industries and thus more exposed to the virus. Some have received pay cuts, and some lost their livelihoods all together relying on savings. The most vulnerable resorting to reducing food consumption and effectively falling into poverty. Even within the formal sector,
there has been loss of revenue due to reduced activities in sectors like industry, commerce and hospitality with the effects felt throughout their supply chains and extending into the informal sector. Travel restrictions have led to a sharp and substantial fall in demand for movement and subsequent impacts on supply chains: › Road freight and logistics have been interrupted as long-distance truck drivers are suspected to be a major source of imported infections and transmission. This has had implications for trade and cross-border activities. Goods take longer to reach destinations. For perishable agricultural commodities, post-harvest loses become rampant.
A Simple typology of house holds in the African context “Missing middle” in Social Protection HOUSEHOLD TYPE
Informal, poor
Focus is on short term consumption-smoothing, in need of government cash transfers
Informal, non-poor, Informal, non-poor Vulnerable non-vulnerable
Precautionary savings to last for a few weeks
Precautionary savings + Long-term savings
Figure 1 : Typology of households in the African context
Formal
Part of mandated Social Insurance schemes
› Kenya is the world’s number 2 exporter of tea and world’s number 4 exporter of flowers and both these critical industries have experienced a negative impact from Covid-19 related restrictions. For instance, tea prices declined by 18% year-over-year in May, reaching the lowest point since 2014 and fresh cut flower sales declined by about 40% in March versus the previous month.4 › Disruptions in global supply chains have also led to shortages or delays for critical inputs for agriculture, ultimately disrupting production and food supply, as well as manufacturing, leading to price increases. Increased awareness of hygiene signifies increased demand for limited resources like water as well as increased demand for disinfectant used for hand cleaning and sanitisation with additional costs to society, particularly where access is not straightforward. Additionally, generated grey water from washing points can become a public health/ environmental nuisance if appropriate infrastructure to handle or dispose such grey waters is not put in place immediately. The Covid-19 outbreak has affected people differently based on their age, gender, (dis) ability, sexual orientation, health status, migrant status, and ethnicity among other aspects. 4 World Bank (2020) Commodities Price Data (The Pink Sheet).
