Manufacturers warn of job losses, economic hit if protests continue

Vandalised sections of Quick mart supermarket at Mlolongo Machakos County on Wednesday, July, 12, 2023. [Samson Wire, Standard] Kenyan businesses yesterday started counting the cost of protests, which they estimate to be in billions of shillings - a day after opposition-led demonstrations against State tax measures rocked the country. This came as manufacturers issued a dire warning on the impact of the disruption to jobs and the economy. They warned that if the protests last for an extended period, business confidence will be affected, raising the risk of job losses. "The disruptions have had a negative impact on manufacturers through loss of sales, disruption of travel and logistics affecting employees' access to their places of work and manufacturers' supply chain as well as damages and loss of properties such as vehicles, offices, shops, infrastructure, and outlets," said Kenya Association of Manufacturers (KAM) Chairman Rajan Shah in response to queries by The Standard. "While it's difficult to put a specific number to this loss so far, it will run into billions. If this continues in the same manner, it will adversely affect job creation at a time when our industries are grappling with an increased cost of doing business." The manufacturers fear further economic damage to their businesses if the disruptions persist. "While Kenya Association of Manufacturers acknowledges that citizens have the freedom to peacefully express themselves, it is critical that this should be done without interrupting business operations and safeguarding every Kenyan," said Mr Shah. "These disruptions have amplified negative impact on business operations." Earlier on Wednesday, another lobby, the Kenya Private Sector Alliance (Kepsa), put the losses from the disruption at Sh3 billion per day on protest days. It said the losses emanate from the destruction as well as lost revenue as businesses remained shut. "We acknowledge the significance of picketing as a means for individuals to express their grievances and complaints, and we uphold the essential right to peaceful assembly and protests," said Kepsa in a statement. "However, every time the country's economic engines are closed for fear of theft and destruction from people who are taking advantage of the demonstrations, occasions unnecessary losses to the tune of about Sh3 billion daily. "For a struggling economy, reeling from the effects of a prolonged drought, general elections, and economic slowdown last year and compounded by general global economic challenges, Kenya can ill-afford the political activities currently at play," it added. Several people are reported to have died from gunshot wounds during Wednesday's protests. The deaths were reported in Kisumu, Migori, Kajiado, Kisii, and Makueni counties. Property of unknown value was destroyed and looting was reported in various areas, including a Quickmark supermarket on Waiyaki Way, Nairobi that was raided by unknown people on Wednesday evening. Goods of unknown value were looted and the premises set on fire. Motorists using the Nairobi Expressway were left stranded at the Mlolongo exit after rowdy youths vandalised a section of the road. Transport CS Kipchumba Murkomen yesterday put the total estimated damage at Sh707 million. The opposition has hinted that it is considering holding the anti-government protests three times a week; Monday, Tuesday and Wednesday. The move is likely to spook jittery investors and traders who are already counting losses in the aftermath of Wednesday's protests. The Shilling on Thursday hit a record low against major currencies as the political uncertainty intensified. According to Central Bank of Kenya (CBK) data, the shilling exchanged at an average of 141.2853 against the dollar even as retail dollar buyers paid up to Sh150 per unit in banking halls as the demand for the greenback continues to surge. The scramble for the dollar means that buyers - both for trading and hedging purposes - keep bidding higher for the US currency. It has also since emerged that retailers, pharmacies, liquor stores and other merchants across the country are gobbling up insurance that protects buildings from damage caused by societal unrest. They are worried about possible escalation of street violence during the anti-government protests, insurers and brokers told The Standard earlier. Many shops and offices are consequently facing double-digit premium hikes for such policies but buying them anyway because the cost of not doing so might be higher, industry sources said. "Most requests are coming from corporates operating in urban areas, manufacturers and transporters of fast-moving consumer goods," Liaison Group Risk Manager Dennis Karanja told Standard Business in an earlier interview. "We are foreseeing increased interest in the insurance of loss of business (business interruption) arising out of political violence." In many of the areas, police used tear gas and water cannons to disperse the crowds. Traders fear any sustained unrest that will disrupt business activities would cast a dark cloud over their operations and the local economy, which is already facing several local and external shocks. Escalated unrest could also undercut one of Kenya's key foreign revenue generators - tourism. Analysts have forecast political uncertainty could jolt investors at the Nairobi Securities Exchange. Any political jitters linked to the sell-off of shares would shake the market to new lows.

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