Can the digital economy help mitigate the economic losses from COVID-19 in Kenya?

Karishma Banga, April 2020


As of 20th April 2020, there are 281 COVID-19 cases in Kenya, and there have been 14 deaths. A number of measures are in place to reduce the spread of the virus, including suspension of air travel (except cargo flights), closing of borders, curfew and asking businesses to work from home. ODI’s report on Economic Vulnerabilities to Health Pandemics puts Kenya in the top seven low- and middle-income countries most vulnerable to direct adverse economic losses owing to COVID-19 outbreak; its main exports – horticulture and tourism – are very elastic in demand. Shutdowns in China, the US and Europe, notably in the apparel, machinery and footwear subsectors, are hitting manufacturing global value chains, with traditional sectors in Kenya such as the cut flower industry also take a beating. The services sector, which is the biggest contributor to economic growth in Kenya, is directly affected in terms of reduced income and employment. Overall, services contributed roughly 3 percentage points to an estimated 5.6% GDP growth in 2019.

Photo: Increased use of ICT during the coronavirus pandemic. Simone D. McCourtie / World Bank. Licence: (CC BY-NC-ND 2.0)