From the gaming industry to medical services firms, a business boom registered during the Covid-19 pandemic is fast easing out as life returns to normal. Medical laboratory services firm, Pathologists Lancet Kenya on Thursday announced a 28 percent chop on the cost of Covid-19 tests, adding to a trend of deflation of a boom in businesses linked to the pandemic.
The move by Lancet means that it will now cost walk-in clients Sh4,949 to access Covid-19 PCR tests, down from Sh6,949.
“With the reduction, we have facilitated a cut in expenses that would have been incurred by Kenyans who require the PCR tests for travel, work, or other purposes other than Covid-19 symptoms or contact tracing,” said Lancet Kenya Managing Director Mwende Musunga.
Stockists of personal protection equipment(PPE)such as face masks and other accessories such as hand sanitisers have also heavily chopped prices of the items as demand fizzles out on reduced cases of infection.
For instance, a regular face mask that cost Sh20 at the peak of the pandemic now retails at about Sh5 to Sh10 while the price of some brands of hand sanitisers that cost as much as Sh600 previously now go for Sh200.
“Very people buy face masks and hand sanitisers anymore, I have even stopped stocking them in bulk because it locks up my capital for nothing,” John Mweu, a shopkeeper in Nairobi’s Langata estate told Smart Business.
The gaming industry has also been hit by lower demand and sales in recent months globally as players returned to the real world. For instance, consoler maker, Sony last month posted a 15percent drop in year-on-year Playstation engagement--a sign of tapered demand post-pandemic.
This comes at a time Kenya’s positivity rate continued to drop from a high of 37.6 percent on December 27, 2021. As of Thursday, August 11, 2022, the country’s Covid-19 positivity rate stood at 2.5 percent.
The reduced level of Covid infections has not only hit the previous boom in sales of PPEs, but has also reversed a trend of surges in small businesses and startups surge during the pandemic.
The pandemic accelerated an economic trend in which many Kenyans took to businesses to cover for jobs and earning losses—lifting the gig economy to new heights.
About 1.72 million workers lost their jobs within just the first three months of the pandemic between April and June of 2020 according to Kenya National Bureau of Statistics(KNBS) data, forcing them to turn to self-employment to make ends meet.
This saw business registrations at the Attorney-General’s office shoot up 21 percent within just a year with a record 118,608 new businesses being registered by the end of June 2020 up from 98,302 a year earlier.
Most of the new business registrations were the registration of business names often by small informal traders such as retail shops, barber shops and salons, liquor stores, and others, and private companies.
Unlike a limited liability company, a business registered by name is not a separate legal entity from the owner but it allows individuals to trade legally.
The latest report by the Registrar of Companies however shows that the boom in small businesses and startups has cooled off as the pandemic eases out.
For example, new company and business registrations dropped 16 percent over the 12 months to June as more Kenyans who had rushed to entrepreneurship after job losses due to the Covid-19 pandemic returned to work.
The data show that some 128,800 business names and private firms were registered in the year to June, down from 154,155 in a similar window of 2021 as the country’s economic growth re-energised from the easing of the Covid-19 pandemic stimulated job creation in the major sectors of the economy.
A higher-than-expected 7.5 percent economic growth last year saw the creation of about 926,000 new jobs easing the pressure on individuals to start their businesses to eke a living, according to KNBS.
The data by the statistics office shows the total employment outside small-scale agriculture and pastoralist activities grew by 5.3 percent to hit 18.33 million last year up from 17.4 million driven by sharp growth in trade, manufacturing, tourism, construction, and transport.
This for the first time pushed Kenya’s employment above the pre-pandemic level of 18.14 million in 2019 before the pandemic wiped out nearly a million jobs on the back of trade and movement restrictions.
The highest proportion of the new jobs was created by the education sector which increased the level of employment in the sector to 609,200 following the resumption of learning in schools.
Manufacturing also enjoyed a good turnaround in fortunes with the sector adding 6.3 percent more jobs bringing the number of workers in the sector to about 336,800.
Company registrations rose sharply when the pandemic struck two years ago.