Impact of the COVID-19 on the Kenyan Economic Development
As with the entire world, the effects of the covid-19 on the Kenyan economy have enraged beyond the core of the health care and by extension, the general economic development is anticipated to be adversely disrupted. A significant reduction in the movements as a result
of the restrictions and bans that have curtailed the foreign investments and any other kind of transactions, in and out of the country .precisely, in this essay ii will succinctly discuss the effects of this pandemic on the three sectors of the Kenyan economy; the agricultural sector, Kenyan currency in relation with the foreign currency and the Kenyan Gross Domestic Product (GDP).
While the Covid -19 is the global pandemic, it has close and the immediate impact on the Kenyan agricultural sector, specifically the horticulture and the floriculture exportation products. Considering the stringent restrictions and the bans on the flight, yet this is the main mode of transport for the horticultural products, has zealously crippled the demand for the global market, majorly Europe and Asia. recently,
the horticulture industry was severely writhing in the yoke of great dilemma in trying to strike a balance between their employees and maintaining their status quo. Most of these firms have immensely laid off their employees as a result of the prevailing economic discrepancies. In addition, they desperately are striving to barely survive from their outstanding loans from various lending firms. Their firms, in terms of their running capacity, have drastically declined at a vigorous rate . Its subsets, like tea and the coffee exportation have also nosedived due to notable decline in the demand and low price commodities in the prospectus market . Intriguingly, there is significant increase in the demand for the vegetable exports, nonetheless, due to limited flights has acutely affected the revenue accrued from these exports . The two substantive exports; floriculture and horticulture are the paramount key players in the Kenyan economy in terms of foreign exchange.
It is worth noting that a crisis in a country’s economy, transcendently impact on its currency value. Due to these stretching effects of the pandemic, it is an intuitive expectation of everyone that the Kenyan shillings will leverage within the range of 10% in comparison with the dollar, to means $1=ksh110. There will be an inconsistent fluctuation, proximately ksh 104 and 108 in comparison with the dollar. All these effects on the Kenyan currency are attributed to the decreased in the horticulture and the floriculture exports, which are the major balancing factors in terms of Kenyan currency and the foreign currency . while on the hand, formal sector
especially the manufactured goods recorded the rise
in the revenue collection, however, with the monster in the house,
ad indeed the affected part by this crisis will be the informal sector which according to the research, contributes to approximately 80% of the Kenyan
employment pattern and the structure. The central bank of Kenya project that if the crisis prolongs the Kenyan currency will be disproportionately subtilized further to unreasonable rates.
Despite this, the Kenyan Cross Domestic Products (GDP) is anticipated to substantially decline as a result of the Covid-19 pandemic. The Central Bank of Kenya reviewed its projection for the year 2020 to likely to decline from 6.2% to 3.4 %.In the same context, it is prudent to note that this pandemic coupled with locust inversion in the country has negatively impacted the agricultural sector which by extension, will retard the GDP growth. Therefore, economic growth is predicted to drastically decline. According to the World Bank Kenyan Economic Updates, there is a great potentiality of downturn scenario in the growth of the Kenyan economy, if the pandemic persists.
In conclusion
from the above-mentioned effects of the pandemic, it suffices to say that
it is far-reaching repercussion will track Kenyan economic development to the cocoon of economic nightmares among the agricultural, foreign currency exchange, and the general gross domestic products of the Kenyan economy.