Business names registered in the 11 months to November fell by 2.9 per cent.
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New business registrations cool off after 2020 mad rush
New business registrations at the Attorney-General’s office have slowed down as fresh job opportunities provided a breather for thousands of Kenyans following the damper put on employment by the Covid-19 pandemic last year.
Start-up registrations had, for the first time, crossed the 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.
The latest statistics by the AG’s office, however, show that things are gradually cooling off as the economy recovers.
Following the full reopening of the businesses after the lifting of curfews and other restrictions, as well as rollout of Covid-19 vaccines, companies have hired new workers or recalled suspended staff.
Data from the Registrar of Companies shows business names registered in the 11 months to November fell by 2.9 per cent to 84,767 from 87,303 registered in the same period last year.
Private companies registered in the same period were 42,626, a 6.4 per cent reduction from 45,547 last year.
The coronavirus-induced restrictions last year triggered massive layoffs and pay cuts. Data from the Kenya National Bureau of Statistics (KNBS) showed 1.72 million workers lost jobs in the three months to June when Kenya imposed the lockdown.
The number of people in employment fell to 15.87 million between April and the end of June, compared to 17.59 million the previous quarter, with young people being the hardest hit.
Adapting to pandemic
Those who were laid off moved to set up their businesses such as liquor shops, food and fruit outlets, eateries, car washes, or working as home personal trainers or personal chefs to adapt to the pandemic.
Now, it appears that the private sector has frozen the job cuts as business activities resume to almost pre-pandemic levels.
A report by Stanbic Bank Kenya’s Purchasing Managers Index (PMI) showed private-sector hiring increased in November, growing fastest in two years, attributed to increased workload after lifting the 18-month night-time curfew. Companies in agriculture, wholesale and retail, services and mining sectors reported “solid expansion” in the workforce over the month.
The overall PMI reading for November – a measure for month-on-month private sector activity – rose to 53 from 51.4. This was the highest monthly growth in business deals in 10 months, signalling an upturn in demand for goods and services.
Sectors such as hospitality, which were the worst hit by the pandemic, have reported increasing their workforce, hiring to match recovery in the sector.
Commercial banks, such as NCBA, have recruited 340 staff after the opening of seven new branches through the year, out of which 220 are permanent employees. This almost reversed a lay-off of 130 employees amid the pandemic last year and 350 temporary staff.
However, some sectors such as manufacturing continue to struggle due to high costs of production and global supply constraints.
Manufacturing was the only sector that did not report a significant expansion in job opportunities, according to the PMI.