Lessons learnt by businesses from Coronavirus pandemic
Lewis Njoka @LewisNjoka
As they say, every cloud has a silver lining and the Covid-19 pandemic situation is no different.
Despite being the worst global health crisis in the last century, experts say, the pandemic has provided the Kenyan economy, businesses and individuals with useful lessons, they can employ going forward.
Top lesson for the government, they state, is that it must create both fiscal and monetary policies that accommodate and review how well measures can trickle down to increase money supply and hence support businesses.
Independent investment consultant Elizabeth Nkukuu for businesses, it is important they have sufficient cash buffer to run their operations even when the sales do not perform so well.
“We should also ensure that we are diversifying our investments so that if one portfolio is troubled we still have some sufficient buffer and that we need to be more diligent as we undertake our investments and as we even start a business,” she says.
For individuals she says now more than ever before, people must create emergency funds and seek to extend that from three to six months of their living expenses, to like 12 months and more.
However, although economists are predicting that 2021 will witness significant growth even as vaccination efforts continue to be slow, with the emergence of new strains of the virus, uncertainty still abounds.
In the recent past, infection rates have spiked in the larger Western Kenya region with the Ministry of Health blaming in on new Covid-19 virus strains such as Delta variant, first detected in India in late 2020.
But the economic outlook is optimistic with NCBA Group recently projecting that Kenya’s economy will grow by 5.3 per cent this year up from a 0.6 per cent contraction in 2020.
In May, the International Monetary Fund (IMF) said it expects the economy to grow by 6.3 per cent this year.
The optimistic prediction is corroborated by the government and development partners with Treasury saying it expects the economy to grow by over six per cent in the medium term.
The growth will be driven by, among other factors, the fact that businesses have adapted to operating under the pandemic.
“With adaptation, businesses have managed to do better than last year. It is unlikely that we could see a contraction,” said Faith Atiti, a Senior Research Economist at NCBA.
Samuel Nyandemo, a senior economics lecturer at University of Nairobi, says the pandemic has pushed businesses towards e-commerce, a move that will benefit them going forward.
Additionally, it has forced organisations to take steps towards making their businesses more sustainable, something they largely ignored before the pandemic.
“Digital marketing has now taken centre stage. Kenya is lucky in that it is highly advanced in terms of ICT, hence, has an upper hand compared to other countries in the East African region,” Nyandemo said.