Thousands stare at job losses as insecurity hits key sector

 Kenya: More than 150,000 jobs are on the firing line as performance in the tourism sector registers a steady decline over growing insecurity concerns in the country. With thousands laid off, this will affect other sectors which depend on the sector to survive.

“We are staring at massive job cuts if the situation will not improve and this will create a ripple effect in the economy,” warned Albert Njeru, the Secretary General of the Kenya Union of Domestic, Hotel, Educational Institutions, Hospitals and Allied Workers (KUDHEIHA).

He says that with unemployment, many young people declared redundant are likely to engage in crime.

KenolKobil Group managing Director David Ohana recently told a media briefing that a number of seats in the local flights between Nairobi and Mombasa were unoccupied, sending the clearest signal that all are affected.

“I left Mombasa recently for Nairobi and the seats were almost empty,” Ohana stated. He feared any continued insecurity fears will dismally affect the transport sector and as a consequence see growth prospects doomed.

Though Kenya Tourism Federation has called upon France, United States, UK and Australia to rescind the travel advisory decisions, the peak period for Kenya’s tourism industry still faces a bleak future with persistent terrorism acts.

Kenya Tour Operators Association chairman Fred Kaigwa says that a lot is at stake here and if necessary, all the parties need to meet and deliberate on way forward.

“This situation needs adequate financial machinery from the government and other stakeholders to reverse the trend lest the sector goes on its knees,” he warned.  

Lead to collapse

The players argued that the decline in the sector will lead to a collapse in the entire economy of the country.

Places to be avoided for example include nightclubs and hotels, consequently leading to a decline in bed occupancy.

This will have a further consequence on Kenya’s agricultural sector as some of the food products consumed at the hotels come from farms.

Planes had been chartered to fly out the departing tourists with some tourists reducing their stay in the country.

According to the ministry data, tourist arrivals in Kenya fell by 15.8 per cent to 1.49 million last year due to insecurity fears.

However, travel agents said they hoped other destinations in the Great Rift Valley and around Mount Kenya would still attract visitors.

Though some feel that this is the time domestic tourism has to be promoted, the Kenya Tourism Federation Chief Executive Agatha Juma says that the country would lose out on foreign currency.

The dollar for example plays a significant role in Kenya’s transactions and lack of it will see the cost of purchasing goods increase.

As a consequence, this will see the foreign currencies appreciate in value against the local currency.

Amid this fear, the shilling is likely slump against the major foreign currencies such as the dollar and the sterling pound.

As a key source of Kenya’s foreign exchange earner, the decline is likely to see the cost of living increase to the advantage of the majority of Kenyans who still live on less than $2 dollars a day.

This is also likely to erode prospects of improving Kenya’s Foreign Direct Investment (FDI).

Over the last few years, Uganda and Tanzania have become major destinations for FDI, overshadowing the once perceived big boy, Kenya.