Fewer orders, late payments, and defaults are the key issues small businesses in Nairobi are grappling amid a biting liquidity crunch.
Small and Medium Enterprises (SMEs) ranging from merchandise supply to service providers are struggling to stay afloat, with the latest financial sector stability report showing that half of Kenyans who take goods from shopkeepers on credit either delay in making payment or default altogether.
"The last three months have been hard. Even the people we have worked for are not paying on time," says Agostine Gandi, the managing director of County Pride Ltd, a sanitation company serving NGOs, factories and faith-based organisations.
In the transport business, owners of trucks and lorries say they are forced to pay cess in every county they pass, which raises their cost of doing business.
The Truckers Association of Kenya Secretary General Kennedy Karisa says business is generally slow and county governments have not made things easier by introducing double taxation.
“For instance, when transporting construction materials from Athi River to Murang'a, you are forced to pay cess in Machakos, pay again in Nairobi and then pay at Kenol as you enter Murang’a,” said Karisa.
He says real estate business, which is a major pillar for transport activities, has been hit hard.
This means that transporters have fewer contracts to deliver materials to construction sites.
Government data shows that transportation and storage sectors recorded a slowdown in activities in the third quarter of this year, growing by 7.2 per cent, down from 8.4 per cent in the same period last year.
Players in the entertainment business have also not been spared, with some being forced to downsize while others have closed shop.
“We have had to close some shops in the CBD (central business district) and diversifying into other things like selling phone accessories,” said Titus Mugo who runs movie shops in the CBD.
Austerity in government agencies as the National Treasury tries to bridge an ever-widening budget deficit has also starved many businesses of orders.
The net effect of this coupled with late payments is slowly killing businesses around the country, leaving millions of Kenyans devoid of a means to earn their daily bread.
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