COVID-19 Pandemic Could Widen Existing Inequalities for Kenya’s Women in Business
June 30, 2020
By Miriam Gathigah
NAIROBI, Jun 29 2020 (IPS)
Pauline Akwacha’s popular chain of eateries, famously known as Kakwacha Hangover Hotels and situated at the heart of Kisumu City’s lakeside in Kenya, is facing its most daunting challenge yet. Akwacha and other women in business across this East African nation are bracing themselves for the post-COVID-19 economy.
Strategically located at the heart of Kisumu’s bustling central business district, business at Kakwacha had always been very good. One could hardly find a seat at the eateries.
“We are known for our fresh, traditional foods, including meat and especially fish. This is the lakeside and fish is a big part of our lives. The meals are very affordable and the portions filling,” she tells IPS.
The first COVID-19 case in this East African nation was confirmed on Mar. 13. Within days the Kakwacha chain, other restaurants and the hospital industry closed as the government issued strict social distancing protocols to curb the spread of the virus.
“Now my doors are closed and am losing a lot of money because I still have to pay rent and do whatever is necessary to cushion my staff,” Akwacha says.
To reopen, Kakwacha will have to follow the strict guidelines issued by the Ministry of Health. Restaurant owners are required to pay from $20 to $40 for each staff member to undergo mandatory COVID-19 testing before reopening.
Still, without cash flow, Akwacha will find it difficult to re-open.
Across the street, Irene Omari, the sole proprietor of one of the biggest branding companies in Kisumu City and its surroundings, has similar concerns about the market post-lockdown. As a woman, she struggled to access loans to start her business.
“It is very difficult to run a business as a woman. In the beginning I could not even access credit because financial institutions did not take me seriously. I had to learn to spend 15 percent of every coin I made, and save 85 percent to plough back into the business. Women do not access loans easily because of strict collateral requirements,” Omari tells IPS.
Omari says that the most pressing problems women in business face, include a lack of credit, patriarchal stereotypes and naysayers who tell women that they cannot succeed — because they are not men.
But she succeeded despite this. Up until the lockdown, her printing and branding business occupied two large floors in a building in the lakeside city. There, she pays $1,500 in rent per month, a considerable sum that shows just how big and strategically-located her business is.
“I brand for hotels, schools, companies, non-governmental organisations and walk-in individual clients. We have something for everyone. Our printing department caters mostly to schools. I have invested heavily in mass production by purchasing machines worth millions [of Kenyan shillings],” Omari tells IPS.
But COVID-19 has also hit the very heart of her business. With schools, hotels and restaurants closed, and as companies face a most uncertain future, business is at an all-time low.
Omari has diverse business interests and also invested in a trucking business to transport construction materials across the larger Western region. But this industry has also been impacted by the lockdown.
Kenya’s gross domestic product (GDP) is projected to decelerate significantly due to COVID-19. The most recent World Bank Kenya Economic Update predicts economic growth of 1.5 to 1.0 percent in 2020. Growth focus for 2020 was estimated at 5.9 percent pre-COVID.
While COVID-19 may be the latest addition in a long list of challenges that women in business have had to endure, there are concerns that the pandemic will only widen existing economic gender inequalities.
In 2018, only a paltry 76,804 or 2.8 percent of the country’s formal sector employees earned a monthly salary in excess of 1,000 dollars. Of these employees, 36.5 percent were women, accounting for only one percent of the total formal sector employees, according to the Kenya National Bureau of Statistics.
There are no real-time statistics available yet on the impact COVID-19 has had on women in business.
But dated statistics paint a picture of the difficulties women had have to overcome.
Overall, Kenya has significantly expanded financial access and reduced financial exclusion. The number of people without access to any financial services and products reduced from 17.4 percent in 2016 to 11 percent in 2019. But while financial access gaps between men and women are narrowing, women are still lagging behind, according to the Central Bank of Kenya financial access survey of 2019.
For instance, in 2016, 80.9 percent of women-to-women business partnerships were denied loans by micro-finance institutions, according to the Kenya National Bureau of Statistics.
As such, more women in business are turning to the informal sector such as table banking or merry-go-round savings and lending groups.
“This is why investing in women and providing much-needed affirmative action support remains necessary and urgent,” Fridah Githuku, the executive director of GROOTS Kenya, tells IPS. GROOTS is a national grassroots movement led by women, which invests in women-led groups for sustainable community transformation.
So far, this Deliver For Good local partner has invested in nearly 3,500 women-led groups. Deliver For Good is a global campaign that applies a gender lens to the Sustainable Development Goals and is powered by global advocacy organisation Women Deliver.
In the agricultural sector where, according to World Bank statistics, women run three-quarters of Kenya’s farms, the government says that women’s investments in farming does not match the amount of money they receive in loans.
Currently, women still only account for 25 percent of the total loans issued by the government’s Agricultural Finance Corporation (AFC). This, experts say, is an improvement from 11 percent in 2017.
Githuku points out that previously land title deeds were a non-negotiable requirement for loans with the AFC and prevented women-led enterprises in the agricultural sector from accessing credit.
Today, women do not have to rely on land title deeds and can support their loan applications to the AFC with motor vehicle log books and cash flow statements.
But experts are concerned that these loans might come to naught as COVID-19 continues to disrupt the entire farming chain; from the acquisition of farm inputs as farmers struggle to access seeds and fertiliser, to productivity on farms, and the transportation of produce to the markets.
For now, it is a wait-and-see situation for women in business, including Akwacha and Omari, as Kenyans continue to speculate on whether the economy will fully open up anytime soon.
The post COVID-19 Pandemic Could Widen Existing Inequalities for Kenya’s Women in Business appeared first on Inter Press Service.
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