More Kenyans likely to lose jobs due to economic paralysis brought by the recent poll
Firms may have to retrench more workers in order to survive election storm
With thousands of jobs having been lost so far this year in the banking and manufacturing sectors, analysts said the private sector will at best freeze new hiring or worse off result to job cuts in order to survive the storm.
This comes on the back of one of the worst corporate earnings season with various Nairobi Securities Exchange-listed firms issuing profit warnings.
A number of them have announced that their earnings for the full year ending this month will be lower by at least a quarter compared to the year before.
“A few factors have ganged up to make it very hard for companies to retain the people they have or even review their terms,” said Jacqueline Mugo, executive director of the Federation of Kenya Employers (FKE).
Besides the protracted elections, Mrs. Mugo noted that the virtual shutdown of the plastics manufacturing industry in the wake of an official ban on use of carrier bags is also likely to prolong the labour market recovery.
Hundreds of jobs have been lost at manufacturers of plastic bags which were banned in a move the government said was meant to protect the environment.
She said FKE has noted significant job cuts in agriculture, service and tourism among other sectors.
With an estimated one in every five Kenyan youth of working age unemployed, the soft jobs market signals a worsening of a crisis that can only feed back into the overall economy through weaker demand for goods and services.
The task of creating more jobs has become even harder amid adverse long-term structural changes in the economy.
The labour-intensive agricultural and manufacturing sectors are growing at a slower pace compared to service industries which are riding on automation to eliminate the need to hire more people.
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