Inside Politics

Curfew rules lead to surge in side hustles

Monday, April 19th, 2021 00:00 |
Small business.

ECONOMY:  Almost half of the residents in the five recently zoned counties in Kenya are dependent on side hustles and short loans to cope with the Covid-19 pandemic.

A recent survey by the Consortium of Research on Governance (Corg) shows that 21 per cent of the residents have started side hustles as a coping strategy while another 17.8 per cent are using short term loans to cope.

The trend comes after President Uhuru Kenyatta imposed cessation of movement into and out of Nairobi, Kiambu, Kajiado, Machakos, and Nakuru counties in a bid to curb a surge in corona virus infections.

In the March 26 directive,  curfew hours were reschuduled from 10pm to 4pm to start at 8pm to 4pm, meaning people now have fewer hours to engage in business.

A majority of Kenyans (61.2 per cent) have taken mobile/unsecured loans in the last three months, with 45.2 per cent of these doing so repeatedly.

Worse still, 66.7 per cent of Kenyans are facing difficulties servicing long term loans (above 3yrs), leading to a rise in the rate of default.

During that period, Kenya’s private sector activities fell to a nine-month low in March, as companies registered a slower pace of output growth and sales and rising fuel prices led to increased product costs, according to the latest Purchasing Managers Index survey data.

The Stanbic Bank Kenya PMI hit 50.6 from 50.9 in February. Readings above 50 signal an improvement in business conditions on the previous month, while readings below 50 show a deterioration.

 “The government should lift the curfew and lockdown to allow the mobility of goods and people to give the economy an impetus by allowing businesses to operate unhindered,” said Charles Mc’Olonde, the consortium team leader.

According to the study, 74 per cent of Kenyans have faced challenges in affording basic needs during the pandemic with a majority (59.8 per cent) forced to skip meals.

So far, only 38.2 per cent of the residents have successfully transitioned to working from home, according to the survey.

“The government should zero-rate basic commodities and offer subsidies to companies dealing with basic commodities,” he added.

While Kenyans are aware of the funds received by the national government to mitigate the effects of the pandemic from partners such as the International Monetary Fund (IMF), most of them said they have not benefitted from such funds.

Funds poorly utilised

According to the survey, 82.9 per cent feel the funds have been poorly utilized.

Only 5.9 per cent of the respondents said they had benefitted from the relief programs offered by the national government.

The lockdown announced to combat the spread of the virus has taken a heavy toll on the health of the residents with half of them (51.1 per cent) saying they have experienced emotional problems such as depression, sadness or anxiety. 

“Government should provide mental health sensitization and low intensity interventions to individuals and groups to help curb mental health related problems,” recommends the survey report.

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