Covid-19 Slows Kenya’s Private Sector Performance in April

“The higher deficit was attributed to lower service receipts, which more than offset the increased receipts from exports and remittances.”

The Port of Mombasa

Activity in Kenya’s dominant private sector suffered a sharp contraction in April as authorities imposed fresh restrictions following a surge in coronavirus cases, a survey showed.

This was the first decline in activity and new business since June 2020 due to the partial lockdown in five counties, Nairobi, Kajiado, Kiambu, Nakuru and Machakos.

This had a considerable impact on movement and demand according to the latest monthly Purchasing Managers Index (PMI) released by Stanbic Bank Kenya on Wednesday. 

The index fell sharply below the 50.0 neutral value in April, posting 41.5 to indicate a marked deterioration in business conditions.

Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.

”The increased restrictions resulted in lower demand which forced firms to cut back on output and spending on inputs. Despite a continued rise in input prices driven by higher global commodity prices, several firms offered discounts to customers to try to improve sales,” Kuria Kamau, fixed Income and currency strategist at Stanbic Bank said.