Kenya will experience a sluggish recovery in employment according to business leaders who gave their insights into the business environment in a webinar hosted by the Kenya Private Sector Alliance.
The coronavirus pandemic has seen massive job losses across the Kenyan employment sector between March and July. For instance, in Kenya’s July PMI showed recovery as it was above 50 basis points but failed to capture the contraction in employment in the month.
Jibran Qureishi, Standard Bank head of Africa research, opines that the damage may be prolonged as retrenched workers may not immediately find work in the post-COVID era. He fears that the recovery in PMI recorded in July failed to capture the extent of the damage in the employment sector.
In addition, the uncertainty due to lack of an FDA approved vaccine and the limitation on international flights may hinder long term expansion plans. This may see firms put a hold on hiring. Jibran also expects fast-moving consumer goods (FMCG) and services whose value chain relies on the tourism sector have a sluggish recovery.
On his part, Muchai Kunyiha, chairman of the Kenya Association of Manufacturers (KAM) said that the manufacturing sector remained battered due to contraction in consumption. He says that in the education sector, manufacturers of uniforms, pencils, and school equipment have reduced production due to falling demand.
On the other hand, manufacturers supplying to tourism and hospitality industries have witnessed dwindling orders for foodstuffs. Kunyiha says that in the next four months the manufacturing sector may not employ new staff as redundancies have become a norm.
He opines that the FMCG sector has seen a reduction in higher-value products such as clothes, personal care items probably explaining why some retailers are struggling.
Gilbert Langat, CEO of the Shippers Council of Eastern Africa, said that Kenya experienced a huge impact on transport and logistics due to restriction of movement. For instance, the Airfreight side had a slump in capacity from April to July due to a ban on international flights.
Mombasa port recorded 8% reduction drop in cargo volumes especially from China and India as freighters cancelled their call. He noted that there was a rise in demand for finished products especially the ones used in the prevention and handling of COVID19 related ailments.
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