People waiting to be served at Huduma Centre. FILE PHOTO | NMG New business registrations at the Attorney-General’s office for the first time crossed then 100,000 mark in the year to June as the economic fallout from the pandemic pushed many Kenyans to seek State tenders or venture into entrepreneurship in the wake of layoffs and job cuts.
Data from the Registrar of Companies shows the business names registered in the year to June rose 38.7 percent to 101,674 compared to 73,302 in a similar period last year.
Business name registrations have been rising by single digits in recent years, including 3.1 percent in 2019 and 8.9 percent in 2018.
The listings were driven by Kenyans seeking to start small businesses, with the majority targeting supplying the national government, county governments and State corporations with goods and services.
“We have not completely appreciated what happened last year where Kenya National Bureau of Statistics released quarter two figures that showed that nearly 1.7 million Kenyans lost their jobs and some of them opened new businesses,” Kwame Owino, the CEO of the Institute of Economic Affairs, said.
Trading in government is now viewed as the shortest route to fortunes in Kenya’s economy over building enterprises, sparking the rush for business names—which are a requirement for those seeking State tenders.
The increased registration of single-owned businesses and small partnerships underlines the struggle to eke out a living for thousands of people displaced in the jobs market.
Many Kenyans started to operate small businesses out of the boots of their cars to make ends meet as the coronavirus crisis hit jobs and the economy.
Analysts reckon that layoffs and fears of losing jobs triggered the avalanche of business name registrations, adding that the majority of those registering new business names eyeing government tenders.
July saw 10,551 businesses being registered — the highest in a single month — and coincided with the month Kenya started a phased reopening of the country from a coronavirus-induced lockdown, lifting restrictions in and out of Nairobi and Mombasa.
Kenya has confirmed 215,730 cases of Covid-19 infections and 4,241 fatalities, with the disease devastating crucial sectors such as tourism and hospitality.Industries and other businesses cut down on their activities in response to the infectious disease, leading to job cuts and unpaid leave for retained staff as profitable firms moved into losses.Thousands of workers lost jobs amid the Covid-19 economic fallout that led to business closures and firms dipping into […]