The release of the latest economic figures provides a sober moment for national reflection. The economy is in a precarious situation and requires strategic responses. Precisely, the burden facing the government is to think carefully about the state of the economy and institute measures to pull it out of the rut and quickly grow it after a sharp decline recorded in 2020 due to Covid-19 pandemic.
Figures from the 2020 Economic Survey that was released yesterday by National Treasury Cabinet Secretary Ukur Yatani indicate that the economy shrank to -0.3 per cent compared to 5.0 per cent growth in 2019. The solace is that the decline was global.
Accordingly, the global economy contracted by 4.2 per cent compared to a 2.9 per cent growth the previous year. But moving forward, countries will be assessed on their dexterity to shrug off the declines and rise to success.
Covid-19 precipitated unprecedented challenges. Countries instituted lockdowns in various forms but whose cumulative impact was to strangle economies. The worst hit sectors were tourism, education, transport and manufacturing. Movements were restricted and travel by air completely grounded. Schools and learning institutions were closed.
Tourism, which ordinarily ranks among the top income earners in Kenya, plunged by 43.9 per cent in terms of revenues. Education incomes dropped by 10.7 per cent and transport 7.8 per cent.
The economic declines translated into massive job cuts and income losses. Matters were made worse by inadequate rains to shower agriculture, which is the mainstay of the economy. It is hoped the situation will change with the gradual reopening of the economy.
Arising out the devastations of Covid-19 pandemic, countries have learnt vital survival lessons. Future economies will depend on technological advancements as workplace practices, manufacturing, distribution and transaction strategies evolve and transit to virtual platforms. Kenya has to rethink its economic model and shift from traditional modes of production to technology-based. This requires innovative leadership and a radical mind-set shift.