Regional economies received a battering courtesy of the Covid-19 pandemic, and the numbers now just prove how damaging.
Kenya, Rwanda and Uganda had by the end of March instituted measures to contain the virus, shutting down the economies leading to job and other economic losses.
Uganda’s economy registered negative growth of 3.2 percent between April and June 2020 compared with negative growth of 1.7 percent recorded between January and March 2020, according to Bank of Uganda statistics. The general economic outlook for the rest of 2020 remains cautious and fairly pessimistic on account of weak consumer spending patterns and the hostile impact of election activity on investment appetite across many sectors.
Kenya didn’t perform any better with the economy contracting by a record 5.7 percent during the three months to June 30 2020 with virtually all key economic sectors – except agriculture and financial activities – grinding to a near halt, pushing over 1.7 million people out of work.
Data by the Kenya National Bureau of Statistics (KNBS) shows that the country’s real gross domestic product declined by 5.7 percent compared with a growth of 5.3 percent during the same period last year.
"Economic activity was markedly subdued in the second quarter of 2020 compared with the corresponding quarter in 2019. The economy was significantly affected by the disease," the agency said.
Kenya announced the first coronavirus infection on March 13 this year. Consequently, the government instituted measures aimed at containing the spread of the virus, including restriction of movement in and out of some counties, closure of learning institutions, businesses and international travel.
According to the KNBS, these containment measures adversely impacted economic activities, considerably constraining production and, in some cases, causing a complete halt.
The slowdown in economic activity was manifested in reduced activity at the Nairobi Securities Exchange (NSE) which saw the NSE 20-Share Index drop by 26 percent from 2,633.3 points in June 2019 to 1,942.1 points in June 2020 while the Kenya shilling lost significant ground against major trading currencies such as the Japanese yen (7.47 percent), dollar (5.13 percent), the Sterling pound (2.95 percent) and the euro (1.49 percent).
Restrictions impact
According to the KNBS’s quarterly statistics released last week, the overall performance of the economy was cushioned from a deeper slump by a 6.4 percent growth in agriculture, forestry and fishing activities and 4.2 percent growth in financial and insurance activities.On the other hand, the performance of the manufacturing sector declined by […]