Kenya Private Sector Alliance (KEPSA), an influential lobby has told firms to engage in local sourcing of inputs, produce for the domestic market and also leverage on opportunities available in regional markets as a cushion against Coronavirus pandemic.
The looby group advises companies to make use of technology to minimize human to human interactions.
This can be achieved through virtual meetings or conferences, working from home, business process outsourcing and cashless transactions to reduce the exchange of contaminated currency.
A KEPSA survey lists Tourism and the Travel business, Transport and Logistics, Industries that depend on imported raw materials as well as Wholesale and Retail business, are listed as Kenya’s sectors that will bear the worst brunt of the worldwide coronavirus pandemic.
When the first case was reported last week, there was pandemonium in Kenya as consumers engaged panic buying in all major supermarkets and retail outlets, fearing the likely shortages of essential consumer products that are usually imported.
The KEPSA report warns that manufacturers, construction and infrastructure developers-who depend on imported materials, will be among the first to feel the heat of the coronavirus menace.
Mr, Victor Ogalo, KEPSA Head of Policy Research and Public-Private Dialogue, adds that public and private projects being implemented by foreign companies or rely on expertise from abroad will suffer slowed progress.
KEPSA mentions several channels through which business activities have already been adversely affected by the disease.
The lobby group says there is increased business uncertainty, disruption of logistics due to travel restrictions to the affected destination, including China and cancellation of business-related travel including major conferences and pre-booked trips.
Most of the firms in the hospitality industry could, the report warns, could experience difficulty in repaying their loans due to cancelled bookings and low business.
A large bulk of firms are expected to suffer severe cutbacks especially those that source their raw materials from abroad. These include contractors, suppliers and manufacturers.
Other disruptions to business include stocks running out or late deliveries, high cost of operations and a wait and see the situation as fear spreads panic around the world.
A recent halt of trading at the Nairobi Securities Exchange (NSE) is a pointer to reduced capital flows and subdued investor appetite, affecting all bourses around the world.
The KEPSA survey lists the least reported cases of disruptions in Real estate (40 %), Education (50 %), Finance and Insurance (56 %) Electricity supply (63 %) and Professional Services (67 %). Its findings further show that 61 per cent of businesses are reporting likely losses of at least KSh 1 million.
Kenya and East Africa’s links with the rest of China and the rest of the world in terms of trade and Foreign Direct Investment (FDI) exposes it to the risks posed by the Corona Virus.
Available figures indicate that between January and February 2020, Kenya’s imports from China declined by 36.6 per cent. Similarly exports to China have been affected due to reduced demand. China imports avocadoes, tea, coffee and other agricultural produce from Kenya.
Statistics from Kenya National Bureau of Statistics shows that KSh 370.8 billion worth or 21 per cent of Kenya’s total imports is sourced from China while trade between Africa and China is 12 per cent.
Top 20 products worth US$ 3.1 billion are imported by Kenya from China, accounting for 85 per cent of the country’s imports. These include electrical machinery and equipment, railway locomotives, iron and steel, vehicles and accessories, textiles, chemical products, organic chemicals and cotton among others.
The 3 biggest items are apparel and clothing accessories (73 per cent), followed by knitted or crocheted apparels (66 per cent) and man-made filaments, strip and textile materials (63 per cent).