The Kenya National Chamber of Commerce & Industry KNCCI in collaboration with The Center for International Private Enterprise (CIPE) today had both a physical and virtual launch of the Longitudinal Survey on the Impact of COVID-19 TO SMEs in Kenya. KNCCI was represented physically by the Chamber President Mr. Richard Ngatia , CIPE was represented by the Country Director. Mr. Ben Kiragu, Niusline Media Director Grace Nzou.

Present virtually were the KNCCI directors, National Governing council and county executives.

Background of the Survey.

The first case of COVID-19 was reported in Kenya on March 13, 2020 (1) and by March 28, 2021, Kenya reported 130,214 cases and 2,117 deaths in the country (2). This prompted the Government to swiftly institute measures to help curb its spread in the country. Schools closed two days after the first reported case on March 15, 2020. On March 25th, 2020, the government suspended most international flights (and required a quarantine of incoming residents who did fly back), closed bars and put restrictions on restaurant hours, and banned large gatherings. These restrictive measures were soon followed by a nationwide curfew from 7 PM to 5 AM daily. On April 5th, 2020, the Kenyan government made face masks mandatory in any public place. This was soon followed by cessation of movement in and out of particular counties, such as Mombasa and Nairobi. In September, restrictions were slightly eased when bars and clubs were allowed to operate again, and the nighttime curfew was pushed to 11 PM (which was later revised again to 10 PM in November and 8 PM in March 2021).

Surveys are being conducted around the world to better understand the impact of COVID-19 on businesses. In Kenya, the Uasin Gishu Chamber of Commerce and Moi University conducted an assessment in Uasin Gishu County that was used to support businesses in the county. Expanding this type of research can generate valuable data and insight on a national scale that could be used to improve government policies and provide better support to businesses weathering this economic and health crisis. Surveys conducted across the country at the county level could provide data to be used to develop business-support strategies that cut across counties, while also developing tailor-made strategies for individual counties.

It is for these reasons that the Center for International Private Enterprise (CIPE) and the Kenya National Chamber of Commerce & Industry (KNCCI), in partnership with the Kenya Pharmaceuticals Association (KPA) and the Retail and Trade Association of Kenya (RETRAK), are implementing a longitudinal study to understand the impact of COVID-19 on business enterprises. Key elements of this study include identifying challenges faced by businesses during the pandemic and ways that the government and relevant associations can support these enterprises in dealing with the effects of the COVID-19 pandemic. The results published here are from the first round of surveying. Later survey rounds will compare to the results in this first round to track changes over time.

Data collection.

Data was collected from over 100 mini markets (groceries), pharmacies (chemists), and restaurants (cafes) through a Google Forms survey administered either by phone interview or self-administration. Mini markets were selected since they represent a variety of value chains and the broader consumer economy. Pharmacies were surveyed due to the recent change in purchasing behavior of Kenyans, who are avoiding health facilities during the pandemic. Restaurants were also included to highlight their economic vulnerability due to the pandemic.

The following were the findings of the report;

  • The survey responses paint a picture of businesses in Kenya that are struggling amid the pandemic, as they have been faced with declining sales, reduced cash flow, reduced ability to access financial resources and supply chain challenges.
  • Decrease in sales was the most significant challenge faced by businesses both before and during the pandemic, but declining sales became a more widespread problem for businesses during the pandemic in late 2020. Approximately half (58.2%) of businesses reported declining sales as a significant challenge before the pandemic (March 2020), whereas 81% of business reported declining sales as a problem in November/December 2020 – an increase of 22.8 percentage points.
  • The pandemic also appears to have disrupted business’ supply chains: many businesses surveyed reported that commodities became more expensive since the pandemic (65.4%), and almost half reported delays in receiving commodities (47%) and/or commodities at inadequate levels (40%).
  • The pandemic has also caused businesses to reduce their staffing levels. Approximately two-thirds (64%) of businesses reported that they dismissed workers between the beginning of the pandemic and when surveyed in November/December 2020 and nearly 40% of businesses were also considering letting go of employees in the future because of the pandemic.
  • The most prominent support that the national government provided in helping businesses adapt to COVID-19 according to their survey responses was providing safety information and protocol (52.3% of businesses were aware of such efforts) and tax reduction (46.4%).
  • Over a full third (35.2%) of the businesses surveyed were not aware of any support measures introduced by their county government while about a quarter (22.9%) surveyed were not aware of any measures introduced by the national government, even though measures were undertaken.
  • Less than half of the businesses surveyed (45.8%) were members of a business association. Of those, nearly three-quarters (72.5%) reported that the associations had been helpful to them during the COVID-19 pandemic. The association support that member businesses found most helpful included linkages to financial institutions (29.0%), providing information on government requirements (27.2%) and online training (27.5%). The advocacy that member businesses found most useful was advocacy for increased access to affordable loans (30.4% of businesses)

Recommendations.

For business associations:

  • Train businesses to adapt to and succeed in the new environment.
  • Increase access to finance through partnerships with banks.
  • Increase communication with members.
  • Partner with the government to disseminate information dissemination.
  • Develop and implement advocacy plans related to pandemic issues.

For national and county governments:

  • Continue educating the public on how to be safe and healthy throughout daily activities.
  • Provide business support grants and loans.
  • Provide helpful, relevant, and easy-to-understand information to businesses concerning health info, directives, and support mechanisms.
  • Provide businesses with adequate personal protective equipment (PPE).