Kenya in 2022; COVID-19, Elections and Rising Poverty Levels – Here’s what that Means for Businesses

Across all sectors, all around the world, businesses are facing the challenge of rapid transformation and uncertain disruptions. In Kenya, 2022 could be more volatile than other parts of the world, with the rise of new Covid variants, increased political activities due to the August general elections, and the rising poverty levels.

For the last 2 years, the country’s economy has been adversely affected by COVID-19 and the pandemic’s unforgiving effects have not spared businesses. Kenya’s, and the world’s international trade performance, commodity and financial markets, and the entire macroeconomic environment have been affected. From the massive disruption of the supply chains, ever-rising rates of unemployment to the monumental losses experienced by businesses and the loans being taken by the government to help people combat the challenges, the virus has changed our way of life. As we continue coexisting with this virus, businesses are on a non-ending search to find new innovative and effective ways to stay afloat and recover their losses to make profits.

Second, Kenya is entering deep into the national elections period and political tensions are at an all-time high. Damages, disturbances, and ultimately, losses from riots, protests, vandalism, or other forms of the general political disorder are most often among the main political risk exposure for businesses in the country. While some businesses are already facing heightened political risks, the majority of them are underprepared, reactive, and most likely lacking confidence in their ability to navigate those risks successfully. As we get anxious about this, business leaders need to have a plan on how to tackle the effects that the political activities may bring on board. Business owners/leaders need to identify and collect political risk indicators; develop, acquire and build the capacity to assess the business impact of political risk, and integrate risk into enterprise-wide processes into strategic planning. They need to stay prepared for anything ahead of the elections – including a possible rerun of the presidential elections like it happened in 2017 as this will greatly disrupt business performance.

Lastly, there have been worrying levels of increased poverty in the country. According to the Kenya National Bureau of Statistics (KNBS), a third of the Kenyan population is living below the poverty line – occasioned by economic inequality, corruption, and inadequate health facilities. This means most of those living below the poverty line cannot afford at least three basic needs, services, or rights and more than half of the population are multidimensionally poor. It is evident that if the effects of the pandemic increase and the political scene continue to be more heated, poverty levels will also increase downward affecting the spending capacities of Kenyans. Poverty is also associated with illiteracy, which can affect productivity. Employees with poor literacy skills may struggle to fully understand workflow instructions and are as well prone to making work-related mistakes, resulting in lost profits and reduced customer confidence.

Unexpected events, ranging from the ones above plus more, can easily disrupt businesses in today’s complex world. The good news is that business leaders can substantially increase resilience by improving their ability to prepare, detect, and respond to disruptions quickly and exhibit the power of business continuity.