Kenya lost Sh700 billion in the past 4 months alone and that may just be the tip of the iceberg
The Kenya Private Sector Alliance (Kepsa) said Key sectors of the economy have taken a beating because of the unconducive business environment witnessed in the country
The Kenya Private Sector Alliance (Kepsa) said Key sectors of the economy had taken a beating because of the unconducive business environment witnessed in the country since mid this year because of politics.
Kepsa attributed most of the losses from frequent disruption of transport and industrial operations during the campaigns ahead of the August 8 General Election and protests that followed the Supreme Court’s nullification of the presidential election.
Kepsa Trustee Patrick Obath said in a statement that wholesale and retail businesses have been hard hit by political protests that have become frequent in recent weeks occasioned sometimes by looting and destruction of their property.
“The harsh political climate has serious implications as medium, small and micro-enterprises employ about 85 per cent of Kenya’s labour force. The education sector has also had its calendar disrupted and national examinations could suffer if the current political situation is not managed properly,” he said.
The Shilling has come under heavy pressure since election fever hit fever pitch forcing the Central Bank to come out severally to sell dollars in the forex market to avoid volatility in the local currency market.
As a result, investors at the Nairobi Securities Exchange took the heaviest hit and lost Sh227 billion paper wealth in the past six weeks.
Market capitalisation dropped from Sh2.54 trillion on August 25 to Tuesday’s Sh2.31 trillion offering yet another measure of the ongoing erosion.
Kenyan factories have also been feeling the pinch.
Kenya Association of Manufacturers’ (KAM) 3rd Quarter Barometer, said most factories were operating at half capacity with 47 per cent of those managers indicating possible layoffs if the situation persists.
More than 53 per cent of the industrial firms had also deferred expansion plans with 75 per cent expecting a further dip in profits, the KAM report said.
In similar fashion, companies and investors have also put on hold major decisions affecting fiancé and investment in the country until the coast clears.
The lucrative but volatile transport industry is not smiling either.
Matatu operators are losing Sh75 million daily as commuters shelve traveling plans for fear of not reaching their destinations safely.
A spot check by Business Insider SSA at the Machakos bus station saw very minimal activities taking place.
Feeling the heat too is the Tourism Industry which is counting losses running into millions of dollars daily.
Kenya Association of Travel Agents (KATA) have cried foul that they lost a record Sh1.5 billion ($14m) loss through cancellations in the past two months alone and tipped the amount to double due to cancelations.
Key sectors of the economy have been negatively affected especially in the hospitality industry, car importation and investor confidence at the Coast and it is not even clear if they will ever recover.
The Federation of Kenya Employers further added that its members were shedding off jobs as a survival tactic in the wake of constrained circulation of money and sharp reduction in customer orders.
The private sector has called on politicians to consider holding a national dialogue to avert further losses warning the situation could worsen after tomorrow’s repeat presidential poll if not well-managed.
JOIN OUR PULSE COMMUNITY!
Eyewitness? Submit your stories now via social or: