Gen Zs struggles with businesses, dreams of moving abroad

5
Gen Zs struggles with businesses, dreams of moving abroad
Gen Zs struggles with businesses, dreams of moving abroad

Africa-Press – Kenya. The push for reforms in the country spearheaded by Gen Zs has seen youths running businesses pay a hefty price, amid economic struggles.

Recent anti-government protests have disrupted normal activities and shuttered businesses in different parts of the country, with Gen Z entrepreneurs not spared.

Young business owners, known for their innovation and adaptability, are also counting losses from looting of investments by protesters, to loss of business mainly on disruption of the supply chain and drop in customer traffic.

Social media, a main platform for both business and advocacy by Gen Zs has also not helped much as the young entrepreneurs feel the pain of the harsh economic times, worsened by the recent protests which saw a drop in business and economic activities.

Mary Wambui*, a 23-year-old business management student at the University of Nairobi sells cargo pants as a side hustle.

She traditionally sources merchandise from flea markets such as Githurai and Kibera, where she buys second-hand items at discounted prices and resells them to her classmates.

This business idea, she says, came after noting a high demand and short supply of cargo pants within her circles, making her decide to venture into thrifting.

“Normally, I make at least Sh5,000 a week and on good weeks even more than Sh15,000 selling each cargo pant at Sh1,000,” she said during an interview with the Star.

However, in the past two weeks, she has barely managed to sell half of her stock.

She has had to look for an alternative method by investing in an online thrift page on Instagram, to reduce the losses she incurred due to the declining market for her products at the moment.

Some of the challenges she faced over the past two weeks when demonstrations were at their peak, included disruption of supply chains and a decline in demand for her products.

Similarly, Lisa Karanja, an electronic media student at Daystar University faced the same in her business, with the tough economic times adding up to her list of challenges.

Karanja, who started crocheting and selling knitted items in her second year in university, has had a stable market up until this year.

She expressed concern over the high cost of materials which was driving her out of business.

“The current state of the economy has greatly affected my business and as a crocheter, I find it hard to price items because customers are not willing to pay higher prices,” said Karanja.

Hundreds of young entrepreneurs across the country relate to the struggles the two are going through, in a country where small businesses don’t see their second birthday.

Data by the Kenya National Bureau of Statistics however indicates that over 400, 000 Micro, Small and Medium Enterprises (MSMEs) are closed annually in Kenya with very few reaching their fifth birthday.

This has led to concerns over sustainability in this critical sector.

The losses recorded in the past weeks came amid continued struggles by SMEs and other small entrepreneurs, where credit access remains a headache for many, amid a tough operating environment.

A huge number of Gen Zs however continue to venture into small businesses, famously referred to as “hustles”, to make a coin, despite the challenges.

Only 1.1 million micro, small and medium enterprises in Kenya have access to formal credit out of the total 7.4 million MSMEs in the country, according to pan-African market insights firm-Stears.

This equals to only 16 per cent of businesses reaping from Kenya’s formal MSMEs financing market valued at about Sh5.9 trillion.

Notably, banks are strongly inclined towards medium-sized enterprises, directing a substantial 86 per cent of loan accounts in 2022 to this segment. Key sectors benefiting include trade, real estate, and transport.

From the insights, a striking 90 per cent of Kenyan banks’ MSME loan portfolios comprise short-tenured term loans and bank overdrafts, a mismatch for long-term investments.

“High collateral requirements and unfavourable interest rates—though lower than those in Ghana and Nigeria, have been found to disadvantage businesses disproportionately,” the firm said in its report.

According to the latest data from the Kenya National Bureau of Statistics (KNBS), Kenya’s population currently stands at about 50 million people and is projected to grow to 57.8 million by 2030.

Millennials and Gen Z make up 55.47 per cent , Gen Z being the most populous with 18.4 million representing 33.42 per cent, while millennials are 12.1 million, representing 22.05 per cent of the population.

Opting to leave the country

The young population, which is struggling to secure jobs and access credit to invest in businesses is now seen to increasingly seek opportunities abroad.

According to a report by Odipo Dev and Africa Uncensored, titled Fame, Fortune and Freedom; Decoding the Shape of the Dream for Kenya’s Gen Z, 84 per cent of Gen Zs would have been open to ditching Kenya for another country.

The report from a nationwide survey of 1,300 Kenyans between ages 18-27, released in May, looked into the attitudes of Gen-Z towards work, how to make money and their ambitions.

“High internet penetration and a tough economic environment are reshaping how young Kenyans think about their future and what their expectations of the work environment are,” the report reads in part.

As per the report, only 16 per cent expressed a preference for continuing living in the country.

High youth unemployment rates, political instability, and limited opportunities for career advancement in Kenya are significant motivators for this, according to experts.

Firstly, the job market in Kenya presents substantial challenges.

According to KNBS, the unemployment rate among youth aged 15-34 remains high.

Many young Kenyans, when asked about working abroad, felt that their skills and education were not being adequately rewarded, leading to frustration and a search for better prospects elsewhere.

Cacey Otieno, a Daystar University graduate, expressed his eagerness to work abroad because the job market seemed more appealing compared to Kenya, where there is an ongoing unemployment crisis.

“If I had an opportunity to work abroad I would go without looking back because the wages are high and you can also work two jobs to make even more money,” said Otieno.

James Omolo, an IT major at Strathmore University, further reiterated how inclusive the job market was abroad compared to Kenya.

“Yes, if given the chance, I would work in Canada. This is due to the job opportunities present there and the country’s willingness to receive a foreign workforce,” said Omolo.

Second, political instability and corruption in Kenya contribute to this desire to emigrate.

Gen Z, known for their activism and desire for transparency, are seen to be disillusioned by the political climate in Kenya.

Corruption and poor governance are said to undermine their trust in local institutions, making countries with more stable and transparent political environments more attractive.

Notably, the countrywide Reject Finance Bill protests, led by Gen Zs since the June 18, spoke against tax proposals tabled by President William Ruto’s administration in its annual budget legislation.

The leaderless movement has so far been successful as Ruto moved to withdraw the Finance Bill 2024, on June 26.

The Dean, School of Applied Human Sciences at Daystar University, Dr. Kennedy Ong’aro, downplaid the long-term impact of the protests.

Ong’aro who has been handling youths as a sociology lecturer for the last 24 years, says that the current push may not yield much because of a lack of leadership and a clear roadmap that offers solutions.

“Change is gradual and that’s what this generation seems not to understand. A majority are only protesting to disassociate from their parents and be seen as liberal. The current youths need serious discussion and mentorship,”Ong’aro told the Star on the telephone.

Javoga Ilavonga, who is studying generational behavior change among young people, says the government has to be ‘extra cautious and seek a desirable balance.

Meanwhile, access to quality education and professional growth opportunities is seen to play a significant role in decisions being made by the young population.

While Kenya has several reputable institutions, many Gen Z individuals believe that studying or working abroad could offer superior education and professional development opportunities.

For More News And Analysis About Kenya Follow Africa-Press

LEAVE A REPLY

Please enter your comment!
Please enter your name here