Nairobi’s economic output has been significantly affected by COVID-19 according to a UN-Habitat analysis on the economic and financial impacts of COVID-19 on major cities in Africa.
Most cities are projected to experience economic contraction which will impact tradable activities, particularly manufacturing and services.
The data shows that Johannesburg and Lagos, are expected to experience negative growth of -2.6 percent and -5.9 percent respectively.
Nairobi’s economic output which is forms a significant portion of Kenya’s GDP (20%), is expected to contract by 5% in 2020, from pre-Covid economic growth projections of 11.6 percent to 6.6 percent.
Dar-es-Salaam which was projected to have the highest growth of 14.8 percent during the year will only reach 10.7 percent according to the projections, while Kampala’s growth is also estimated to shrink from 7.6 percent to 4.9 percent.
Urban economic contraction will directly reduce municipal revenues which, in turn, lead to less financial resources to deliver urban services.
According to a sample survey of five slums in Nairobi on 22 April 2020, 81% of the residents already suffered a complete or partial loss of their jobs and incomes due to COVID-19.
About 65% of the capital’s almost 3.2 million people live in informal settlements occupying less than 15% of the city’s total land area.