Steve Umidha @UmidhaSteve

A dip in employment is expected to persist into the new year as companies struggle to stabilise and emerge stronger in the post- Covid-19 world.

While such prospects were widely projected due to the sharp drop in the country’s economy over the last nine months, experts believe that the labour market will only begin to pick up in the second quarter of 2021, a period that vaccinations against Covid-19 in Africa might start.

First-time steps are being taken to ensure roll out of the vaccine is global. But there have been concerns the race to get the vaccines would be won by rich countries at the expense of poor ones, Kenya being one of them.

Peter Macharia, a banker and independent financial expert said that the last few months have been very tough for most Kenyans, majority of whom lost jobs because of the pandemic. 

“I can see this trend dragging into the first few months of 2021 but could change on a number of factors, among them the  resurgence of the viral disease would have been contained by then,” he added.

Most companies, according to Phyllis Muchoki, a human resource practitioner, are going to have to review their contracts beginning 2021, and this could mean other workers might lose their positions as some of these companies have not closed the year with strong balance sheets.

Data on Kenyan labour force shows, particularly, that young people are disproportionately employed in restaurants, entertainment joints and tourism sectors.

These businesses were largely shut down in March with outbreak of Covid-19 and remained closed through the larger chunk of the year.

Also hit hard by the pandemic containment measuers are retail chains, another popular source of jobs for young people.

In the last nine months, companies reduced the number of their workforce while a good number closed shop due to the pandemic which contributed to reduced production as a result of low demand and high operation costs.

A total of 604 firms sent workers home due to coronavirus fallout, according to Federation of Kenya Employers (FKE), which said that at least 33 jobs were lost in every modern sector company between March and August.

Kenya National Bureau of Statistics estimates that around 1.7 million people had been made redundant due to the outbreak during this time, a figure that FKE termed as “conservative”, meaning more undocumented Kenyans may have lost their jobs beyond this period.

Unemployment rate

Available statistics show that Kenya’s unemployment rate – share of people who want to work but cannot find jobs – currently stands at 2.65 per cent from the previously reported number of 2.64 per cent in December,  2019.

At the African Trade Insurance Agency’s Annual Investor Roundtable in Nairobi yesterday, investors, risk analysts and African governments weighed in on the prospects for the region to recover from the impacts of Covid-19. 

Analysts predicted a subdued recovery in 2021 with the possibility of countries not returning to 2019 growth levels till 2022, said Manuel Moses, ATI’s newly appointed Chief Executive Officer.

People hold different views on unemployment with some attributing it to challenges facing economy while others attribute it to the rising youth population. 

The experts also expressed fear that most Kenyans could be rendered jobless into the New Year, at a time the economic conditions are worsening by the day and value of shilling continues to weaken.

In general, a weaker currency makes imports more expensive, while stimulating exports by making them cheaper for overseas customers to buy. 

A weak or strong currency can contribute to a nation’s trade deficit or trade surplus over time, and this ordinarily has a bearing on long-term decision making by an employer.

Two weeks ago the World Bank also painted a disturbing picture which showed that most employed Kenyans could soon lose their daily source of income as a majority of companies face a high risk of temporary or permanent closure and reduced revenues. 

Private sector recorded a surprise decline in November as businesses lost ground amid concerns over resurgence of Covid, according to latest Stanbic Bank Kenya Purchasing Managers Index (PMI).