'We are losing Sh3 billion on protest days, investors lament

Jamia Supermarket in Kismu that was vandalized and looted by protestors during mass action against high cost of living. [Collins Oduor, Standard] Businesses have said they are losing billions of shillings every single day as a result of anti- government protests. If the demonstrations last for an extended period, business confidence will be affected, raising the risk of job losses and other blows to the fragile economic recovery, they say. The transport sector, manufacturing, retail and services sector have so far been hardest hit by the disruption. The impact of the demonstrations, however, is increasingly affecting other industries too. Looking at similar protests in the past, economists say the economy could take a big hit if they go on. Opposition leader Raila Odinga has called for protests every Monday and Thursday, accusing President William Ruto of stealing last year's election and failing to control the surging cost of living. Police have been lobbing tear gas on protest days, used water cannons to break up protests with at least three civilians reported killed and one police officer since the demonstrations kicked off on March 20. Various businesses have been vandalised, according to police, incurring heavy losses. The Kenya Private Sector Alliance (Kepsa), has put the losses at Sh3 billion per day, losses emanating from the destruction as well as lost revenue as businesses remained shut. In Kisumu, unidentified people damaged private properties including Imperial Hotel, Kibuye Market, United Democratic Alliance (UDA) party branch office, Patel and Posta Flats as well as Quickmart and Sairam Supermarkets, said Interior Cabinet Secretary Kithure Kindiki. In neighbouring Migori County, the Kenya Commercial Bank (KCB) Rongo branch was extensively damaged by riotous mobs. Private sector bodies said the economy that is only recovering from the throes of the Covid-19 pandemic and the o ravages of a four year drought can ill-afford the chaos that have characterised the protests. Kepsa termed the demonstrations a setback to the country's economic growth agenda, claiming that the country has been losing about Sh3 billion daily on the protest days. While the association - which is an umbrella body for private sector bodies in the country - said it acknowledges picketing as a constitutional right, it noted this should be peaceful, but this has however not been the case. "The weaponisation of the country's economic drivers is occasioning unnecessary losses to the tune of about Sh3 billion daily. For a struggling economy, hard hit by 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," said the association in a statement. Kepsa also protested Azimio's call for boycott of products by some private sector firms that the coalition said were biased. "The growing destruction of properties and especially targeting businesses for boycotts last week and destruction this week negatively affect economic and social stability, which the private sector requires to foster growth," said Kepsa. "We firmly denounce the politicisation of private sector enterprises and their constant use as shields in the political battlefront. Capital, both local and foreign, is shy and it will flee where there is no security. We must protect jobs and revenue generated by all businesses for the sake of Kenya's progress." The Kenya Association of Manufacturers (KAM), on its part, noted that the protests have caused disruptions at different levels ranging from industry's access to materials as well as their delivery of products to the market and Kenyans ability to access products. The protests, KAM noted, could have an impact on jobs while the disruptions on such areas as logistics had the potential to make worse the high cost of living that protestors are agitating against. "This will adversely affect job creation at a time when our industries are grappling with increased cost of doing business," said the manufacturers' lobby in a statement. "Disruptions caused by these demonstrations twice a week have significant economic ramifications to our industries and businesses. From low productivity of employees whose safety remains paramount, to inhibited market and consumers' access, logistics and supply chains disruption, vandalism and closure of enterprises in the affected areas." "This will ultimately affect all citizens, their income, and initiatives to build our economy." Simon Kimutai, the Matatu Owners Association, said public service transport was paralysed, especially in Nairobi and Kisumu, on the protest days with PSV oparators only able to run at 50 per cent of their usual service. This only during the early morning commuter hours and late in the evening after the skirmishes have died down. "The protests have affected every sector equally. Business is all about human beings and interactions and when these are not there, businesses suffer," he said. "For us, we are the genesis of all economic activities because we provide travel services that enable Kenyans to be involved in different economic activities. Because of fear instilled in people (by the protests), many restricted their movements to perhaps going to the shop and back (to their houses)." Kimutai noted that the sector employs a large number of Kenyans directly, seen in matatu crews, and supports the livelihoods of many others such as mechanics. With the transport sector paralysed, it has meant that the people who rely on the industry for livelihoods suffer. "The kind of loss we incur is enormous. For instance, whenever the clock ticks and a day goes with your matatu packed, the insurance is spent. Another loss is that when you do not have revenues for one or two days in a week, you might not be able to meet obligations such as servicing loans which come with penalties," he said. The protests have led many companies to start considering political risk insurance, which is set to increase the cost of doing business as well as increase the costs for insurers as they compensate for the destruction they accept to cover. Large and medium sized corporate firms are among entities reporting lodging the majority of requests for political risk coverage. "Most requests are coming from Corporates operating in urban areas, manufacturers and transporters of fast moving consumer goods," said Liaison Group Risk Manager Dennis Karanja. "Although covering the assets remains the main focus for many clients, we are foreseeing increased interest in the insurance of loss of business (business interruption) arising out of political violence." Kenya's economy has a history of slowing down during election years when firms put investment decisions on hold, pending a return to normalcy. Economic growth slowed to 4.81 per cent in 2017 as a result of the bitterly contested presidential poll from 5.88 percent a year earlier. The deadly 2007 presidential poll sank the economy to a growth of 0.23 percent from 6.8 percent the year before. A Central Bank of Kenya (CBK) survey last year found the chief executives saw August election as one of the biggest impediments to growth and expansion of firms.

'We are losing Sh3 billion on protest days, investors lament

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'We are losing Sh3 billion on protest days, investors lament

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