2.5 million households in Kenya have lost their businesses in the eight months that the economy has been reeling under the Covid-19 pandemic.
A report by The World Bank released on Wednesday, November 26, indicated that a third of family businesses have closed shop since March 2020.
Government statistics in 2019 indicate that 7.4 million households out of the 12.2 million recorded in the country operated family businesses.
The report also indicated that the remaining businesses experienced a 50 percent reduction in revenue due to the impact of the Covid-19 pandemic.
"Almost 1 in 3 household-run businesses are not currently operating, and between February and June, average revenue from household-run businesses decreased by almost 50 percent.
"This has exacerbated food insecurity, and elevated pain and human suffering," read part of the report.
The World Bank also indicated that the poverty index in Kenya had ballooned by over two million people with wage workers the most affected.
"The special focus topic finds that the pandemic increased poverty by 4 percentage points (or an additional 2 million poor) through serious impacts on livelihoods, by sharp decreases in incomes and employment.
"Many wage workers who are still employed face reduced working hours, with average hours decreasing from 50 to 38 hours per week," continued the report.
The report noted that the government had deployed both fiscal and monetary policies to support the healthcare system, protect the most vulnerable households, and support firms to help preserve jobs, incomes and the economy’s productive potential.
The tax revenue also dropped below target due to the marked slowdown of economic activity as well as tax relief extended by the government as part of the pandemic response package.
The report also indicates that 93 percent of companies recorded a decline in revenue in the last 30 days as compared to the same period last year.
This comes even as Treasury CS Ukur Yatani projects that the economy is likely to grow by 0.6 per cent in 2020.
