A new study by World Bank has revealed that the COVID-19 pandemic has left close to 2 million Kenyans sinking in poverty.
The sink in the country’s economic growth started in early March after the government imposed restrictions to curb the spread of the virus. Due to decreased income, many companies shut down, leading to mass unemployment as they sent their workers home.
The data came from a phone survey that the bank did between April and May.
Poverty percentage grows by four points
Due to the impact, the World Bank said that Kenyan’s poverty levels rose by four percentage points, to 21 per cent. That figure puts 1.9 million Kenyans in the category of ‘poor people.’
World Bank Economist covering poverty in Kenya, Utz Pape, said the current poverty rate may either be transient or permanent. However, they could not tell because the COVID crisis is still ongoing.
The data also found that forty per cent of the firms closed at the onset of the pandemic in Kenya have yet to reopen.
2021 growth projection
Due to the drop in economic fortunes, the World Bank has revised down Kenya’s economic growth. The institution said that Kenya’s economic growth would shrink by one per cent in a worst-case situation. However, they still projected an increase in Kenya’s economy in 2021, with the growth projected to grow by 6.9 per cent.
This study comes at a time when Kenya is going through a more severe second wave. However, despite the increased infections, the government decided against imposing movement restrictions.
The survey also backs one that Kenya National Bureau of Statistics (KNBS) a few months back. KNBS found that most Kenyans who had lost their jobs this year lost them due to COVID-19.
The burden of economic survival could worsen for Kenyans. This is because the government will impose higher income tax and VAT come January 2021. This move means the price of essential commodities will go up.