Restrictions slows down April output

Thursday, May 6th, 2021 00:00 | By
Police officers beef up security during the first day of lockdown in Old Town, Mombasa, Kenya. The ministry of health on Wednesday restricted movements in Eastleigh residential estate in Nairobi and Old Town in Mombasa following the high number of the novel coronavirus cases reported in the two areas. (Xinhua)

Lewis Njoka @LewsiNjoka

Increased curfew hours and a partial lockdown in the five Nairobi, Kiambu, Kajiado, Machakos and Nakuru counties stymied the country’s output in the month of April, a new report shows. 

According to the Stanbic Purchasing Managers Index (PMI) released yesterday, these measures saw the Kenyan economy suffer a sharp contraction in April with data indicating the first decline in activity and new businesses since June 2020. 

This after a March 26 order by President Uhuru Kenyatta forced cessation of movement into and out of the five counties in slow down a surge in Covid-19 infections in the country, playing a major part in it.

Curfew hours extension

These measures were in response to health reports which at the time showed that 70 per cent of all new Covid-19 infection cases in the country emanated from these five counties. 

Additionally, curfew hours for the zoned areas were revised downwards to begin at 8:00pm in the evening and end at 4:00am. Earlier curfew began at 10.00pm.

The report shows that employment numbers, input purchases and inventory, all slowed down during the month.“Increased curfew hours, had a considerable impact on movement and demand, with the decrease in new orders the most marked since May last year,” reads the report.

During the month, the headline PMI fell to 41.5 well below the neutral value of 50.0. In March the headline was at 50.6.

Readings above 50.0 signal an improvement in business conditions compared to the previous month while those below 50.0 signal deterioration. 

Cost pressures, however, continued to rise due to the higher fuel prices and supply shortages with the future activity outlook at its worst in six years, according to the report.

 “Meanwhile, the outlook for future activity weakened to the lowest seen since the survey began in 2014,” it reads.

According to the PMI report, 43 per cent of the respondents saw an overall decline in output levels while new businesses decreased at a pace close to the one witnessed in the first half of 2020 during the initial Covid-19 lockdown.  

As a result, firms cut employment numbers for the first time in seven months and reduced backlogs at a quicker rate compared to March. 

But despite the gloomy PMI report for the month of April, Kenya Revenue Authority exceeded its targets for the month by Sh6.5 billion collecting Sh176.7 billion against a target of Sh170.2 billion.

The amount is a 23.9 per cent growth in revenue compared to April last year when the taxman collected Sh144.06 billion.

This is the fifth month in a row KRA has exceeded its targets since December 2020 despite the slow economic progression brought about by Covid-19 pandemic. 

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