Coronavirus is having a massive economic impact across the entire world at the moment. With global production slowing, product hoarding taking place in shops and an increase in the death rate, things are not in a positive place for the world at the moment. With Kenya being one of the last countries to see cases appear, it’s interesting to see how Coronavirus has impacted on business in the region.
Even before there were cases reported in Kenya, there had been a clear impact on Kenyan online betting sites. The cancellation of sports across the globe meant that even with a clean bill of health in Kenya, the lack of big-name sports action in other countries meant that betting sites within Kenya suffered a large downturn in business. Existing customers weren’t using the services as much and the number of new customers also dropped to a much lower level.
While it hasn’t completely dried up, there are still small pockets of sport taking place in some countries, it has taken a significant drop. The one saving grace is that casino betting has increased slightly, as players who would usually bet on sport have decided to try out some of the alternatives available at online casinos.
The stock market took a huge hit almost as soon as the first Kenyan case of Coronavirus was reported. The NSE saw multiple traders selling large amounts of shares and the total value shrunk by SH120 billion. This is one of the largest single day drops in the history of the NSE. This was mainly due to the fear of what the spread of the virus would do to the economy within Kenya. One of the biggest hits was KCB Bank which saw a 7% fall in its share prices.
The stock market is likely to stabilise as more news comes out about how widespread the Coronavirus impact is on the Kenyan populace, but for the moment it has seen stark drops that could lead to companies going out of business. As most people know, the asset values of companies are often used to secure loans. Without that value, many companies could struggle to keep trading through this current period of uncertainty.
There hasn’t been any news as to whether loan foreclosures have been temporarily suspended as of yet, and it will likely not become an issue until a large company is unable to continue trading without help from the government or banks.
Tourism is the second largest aspect of the Kenyan economy. It brought in SH163.5 billion during 2019, providing a huge boost to the coffers of Kenya. The Coronavirus pandemic obviously hit this particular industry hard from the outset. Even though Kenya was without cases for a long time, the outbreak of cases in other countries meant that travel into Kenya was restricted. This has obviously led to large drops in revenue that was coming into the country from other nations.
It’s not just flights into Kenya that have impacted on the industry. Air Kenya also announced that it had lost an equivalent to $8 million with flights into China being cancelled when the outbreak was first announced. It impacts on almost every area of the nation when the tourism industry dies, although Kenya isn’t in a unique position as many countries are also suffering from similar issues.
Agriculture is another large part of the Kenyan economy. 83.6% of the country’s workforce is made up of informal manual labourers. These are mostly working on the farms and fields in Kenya where tea and coffee are two of the most important exports. The inability to harvest crops effectively, due to social distancing measures, means that not only are these crops left unpicked, but a lot of Kenyan citizens are left without any work. Without work it means they have no way of supporting their families.
This will obviously have a large impact on the economy as well as the health of many Kenyans. A lack of money means that food will be hard to come by. This in turn will weaken people and make them more susceptible to the Coronavirus. On a human level this is obviously an appalling situation, but also on an economic level it means the workforce will be significantly weaker once the crisis is over.