Tourism and manufacturing firms report losses of up to Sh40 million

Companies in the tourism and manufacturing sectors have reported losses amounting to an average of Sh40 million each, a survey shows.

The losses have been occasioned by the Covid-19 pandemic. The report by the Kenya Private Sector Alliance (Kepsa) also revealed that small and mid-sized companies have been hardest hit by the slowdown in economic activity.

Despite the depressed economic times, a majority of mid-sized companies - 55 per cent - have decided to retain their employees.

Large companies have also decided against laying off workers, with 58 per cent saying they opted to keep their employees and navigate the economic uncertainty. 

“Small and mid-sized companies reported the largest impact (high to very high) at 85 per cent and 83 per cent respectively in comparison to 78 per cent reported by micro-enterprises and 70 per cent by large companies,” Kepsa said in the report.

According to the survey, 58 per cent of large companies have not laid off their workers, particularly in the finance and insurance sectors where 93 per cent of the respondents reported keeping their employees.

The tourism and education sectors have received the most impact, with 95 per cent and 93 per cent of them respectively reporting high to very high impacts due to the closures imposed to limit the spread of the virus.

Companies in agriculture and transport also recorded some of the highest financial losses shedding off an average of Sh20-30 million per company.

“With the world stopping the movement of people, these restrictions have had the biggest impact,” said Kepsa Chief Executive Officer Carole Karuga at the launch of the report.

The report showed that the least affected sectors are finance, health and environment that reported an impact of below 60 per cent.