Nairobi informal area businesses feel Covid pinch

Capital Markets

Nairobi informal area businesses feel Covid pinch

More than 80 percent of retailers in Nairobi’s informal settlements reported demand and supply challenges last month. FILE PHOTO | NMG 

More than 80 percent of retailers in Nairobi’s informal settlements reported demand and supply challenges last month amid supply chain disruptions caused by Covid-19, a study shows.

Latest Impact Initiatives, a Geneva-based think tank, says a majority of retailers attribute the disruption to an increase in prices of items (53 percent) and decrease in demand for commodities (46 percent).

“Other reasons include lack of money to restock (33 percent), lack of commodities from suppliers (20 percent) and Covid-19 movement restrictions (eight percent),” the study said.

The survey was done between July 21 and 23 in Gatina, Gitare-Marigo, Kibera, Korogocho, Kayole, Lunga Lunga, Majengo, Mathare, Mukuru and Soweto.

The polled retailers also reported that local communities faced challenges in accessing local markets due to low purchasing power (94 percent), costly goods (41 percent), lack of items (18 percent) and fear of contracting Covid-19 (seven percent).

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“The proportion of retailers reporting that community members were facing challenges in accessing markets decreased from 75 percent in June to 50 percent in July, which might have been due to the ease of Covid-19 induced movement restrictions.”

Some of the partners included ACTED, Oxfam, Kenya Red Cross, Concern Worldwide and European Union’s Civil Protection and Humanitarian Aid.

In March, the government imposed restrictions to curb the spread of the virus which included a night curfew and movement restrictions in and out of Nairobi, Mombasa, Kilifi and Kwale. The movement restrictions have been lifted.

The move impacted many businesses financially due to supply chain disruptions and a drop in client-base.

The study further said that 449 retailers closed down their businesses between March and June 2020 due to Covid-19 effects. Additionally, 330 were closed last month.

The increase in prices also affected them, especially coming when the purchasing power of many Kenyans has been eroded by job losses and reduced pay.

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