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No respite for businesses as political dispute drags on in court

By Richard Ngatia | Published Wed, November 15th 2017 at 00:00, Updated November 14th 2017 at 22:48 GMT +3

We are staring at anxious days for businesses on the wait for the Supreme Court to make its determination on the Presidential petitions.

Tense because we could, as a country, we are on the edge waiting for the end of the political roller-coaster and the resultant usual baggage on the economy. Investors are holding their cash waiting for clarity before committing capital to projects. However, sooner were are finished the better it gets for everyone and the economy.

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Quantifying the losses

Economists have tried to estimate the losses incurred so far but projected that the current rains would help the economy rebound through improved yields in our farms. Officially, Kenya’s economy would expand by 5 per cent this year despite the drag associated with the drought and politics. Kenya is a very resilient economy that would overcome the hurdle.

It has been a long road for the business community where consumption slowed down months before the original polls held on August 8.  But it in the days that followed where the real test came.

An unprecedented decision to nullify the outcome sent shivers across the country and beyond. Preparations for the repeat poll was a source of jitters across virtually all sectors, from tourism to manufacturing.

It is evidenced by the pile-ups at the seaside storage facilities in Mombasa where importers would rather incur additional safe-keeping expenses, until normalcy is restored.

Any possibility of the cargo getting damaged or lost while on transit from the port is a very scary prospect considering that a single consignment is often worth a couple of millions. Gladly, there were no extreme cases of lawlessness reported anywhere, except only for small isolated incidences. Any possible support would be extended from the different business communities to reduce impact and enable affected business to flourish again.

Sluggish business activity translates to huge direct costs that are absorbed by owners, but are often easy to ignore. Staff costs, for instance, often make up the biggest chunk of running expenses in many industries.

Salaries must be paid

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When business is slow, production is scaled down significantly but salaries still must be paid, regardless. In some instances, we have seen companies resort staff rationalization in extreme cases, but it is our hope that we are starting to bottom out. Without the much needed urgent relief for businesses, we could expect ordinary households to be hard-hit as we approach the festive season.

Several banks have announced cutting back on staff numbers, citing dampened business occasioned in part by poor lending prospects in the regulated interest rate environment.

It is now certain that the political temperatures are cooling to enable Kenyans review the events that threatened their unity and utterances that could have been avoided. I cannot run away from the fact that minor divisions still exist amongst out people but as businesses, we take it in stride and do our part in actively enhance cohesion.

Businesses in Kenya never ask customers for identification before they are served, and if it ever exists, I will be first to condemn. On any given day, the average Kenyan consumes products made by tens associated with companies – even in a single meal like breakfast.

Sugar could be manufactured by a firm in Kwale, coffee from Nyeri, milk produced by a farmer in Githunguri while the cereals are from wheat grown in Narok and fish harvested from the Lake Victoria in Busia. The breakfast I have made reference to, like most finished goods or services, bears the image of Kenya and is a sum of input by many different people.

In bringing together the various components, business opportunity exists for everyone to ensure that when I go shopping, all components of my breakfast are available on the shelf. Many people earn a living from their little contribution to deliver goods to where I can get them and I will pay the fair price.

How to Delink politics

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What consumers see at the shelf are their favourite brands but it is unnecessary, expensive and tedious to list the multitude that played a part. Not even in the movies are all cast and crew acknowledged.

For the Kenya National Chamber of Commerce and Industry, the slowdown associated with elections in Kenya and elsewhere are normal bumps in the journey of our members, from the national to the local levels.

We must collectively fight to cushion enterprises from the political cycles which come every five years, putting in mind that it could take months to recover from adverse effects of a single political incident.

Politics must be handled differently to let enterprises prosper regardless of whom the President, Governor or Member of the County Assembly is.

Mr Ngatia is the chairman Kenya National Chamber of Commerce and Industry, Nairobi Chapter


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