The Kenyan workforce continues to suffer from the adverse effects of the Coronavirus. In the manufacturing sector, casual laborers are bearing the heaviest burden as companies have reduced the casual laborers by 40% compared to a 17% reduction of the permanent workers.
The job cuts have mainly affected workers in the MSMEs. The percentage of Kenyan manufacturers who employ over 100 permanent employees fell from 41% to 30%. With an estimated 79% of manufacturers in Kenya facing cash flow constraints, most have opted to lay off workers in order to cut costs.
A survey by the Kenya Association of Manufacturers reveals that 69% of manufacturers are struggling to pay salaries and wages. As a result, 27% have made salary adjustments, while 39% have sent staff on unpaid leave. Other employers in the sector have stopped recruitment exercises, reduced bonuses, and redeployed staff to tame unrest caused by the pandemic.
Experts warn that the impact of COVID-19 on the workforce will worsen if the manufacturing sector fails to receive support.
“At the moment, many employers are holding onto their employees. If the support doesn’t come forward, that [unemployment] figure will increase”, warns Suresh Patel, Vice-Chair, Chemical & Allied Sector KAM.
Low production capacity further threatens jobs in Kenya’s manufacturing sector. The industry that was the highest contributor to employment in the private sector at 15.9% is barely running at half capacity.
According to the study, the average utilized capacity for MSMEs is 37% down from 74% before COVID-19. Similarly, the percentage of manufacturers operating at over 50% production capacity fell from 88% to 42%. The textile and apparel sector has suffered the biggest drop, where 61% of its players have cut production by more than 40%.
Manufacturers have cut working hours, with 26% operating for less than 6 hours a day. Similarly, 48% have reduced the number of days they work in a week. Before the pandemic, only 2% of manufacturers operated for less than 6 hours a day.