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Kenya: Small businesses feel the weight of election standoff

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Julie Scott, the managing director of travel and tour firm Bunson Travel Service, yesterday received a call from her business partners relaying what has become a regular message in the past month.

A group of about 70 businesspeople that were to jet into Nairobi from around the world for a regional management meeting had changed the venue to Arusha, Tanzania, citing concerns over the volatile political situation in Kenya.

At around 5 p.m., several e-mails dropped in indicating three more parties of business tourists, each numbering about 30, had cancelled their Nairobi meetings — moving them to countries they thought were safer.

Luckily for Ms Scott, Bunson was retained to amend the flight bookings, even as it lost out on transfers, hotel bookings and ancillary business such as tours.

Since the August 8 election and the ensuing stalemate, the agency has lost hundreds of visitors in a series of cancellations, resulting in a 20 per cent plummeting of its income.

Business Daily’s interviews with small and medium enterprises (SMEs) found that nearly all are creaking under the weight of a prolonged political standoff, struggling to meet obligations in an environment of low sales.

“The recent demonstrations have seen many of our clients go slow on new reservations,” Ms Scott said.

“At some point, my employees and I may just be sitting in the office doing nothing but dealing with cancellations. This impasse needs to be resolved soon and peacefully.”

The Kenya Association of Travel Agents (KATA) buttressed her view, revealing that the industry lost Sh1.5 billion in sales in September and the losses could double if the standoff persists.

Sunk to record lows

September was also the reference point for Abdinasir Ibrahim, who runs a fashion stall at Jamia Mall in Nairobi’s central business district.

That is when revenue from his shop, Valentine, sunk to record lows and stayed there.

Mr Ibrahim, who sells women’s accessories imported from Dubai and Turkey, now books average daily sales of Sh10,000 compared to highs of about Sh50,000 before the August election. It gets worse when there are demonstrations in Nairobi’s CBD.

“Our monthly rent is Sh120,000 so you can imagine how strained we are at the moment,” he told the Business Daily when we paid him a visit.

“I usually travel abroad three times every year to restock but sales have been so bad that I am still selling what I bought in April.”

Lillian Nyambura and Don Santo sell mobile phones and accessories at Joetech Communications on Moi Avenue, one of the city streets that experience regular running battles between demonstrators and security agencies.

Today, they sell on average five phones a day, an 80 per cent drop from the 25 handsets on a normal sales day.

The duo contends that while there was a dip in purchases even before the election due to “lower customer buying power”, the political environment has exacerbated a bad situation.

Moza Mohamed, a hairstylist, said she can’t wait to get the election over with.
“I think people have money, but are prioritising it for more important purchases like food,” she said.

The Kenya National Chamber of Commerce and Industry said businesses in sectors such as transport and manufacturing have laid off staff and become “reluctant to take up new stock, fearing losses in the event of chaos.”

CFC Stanbic Bank’s Purchasing Manager’s Index (PMI), which seeks to measure the health of the country’s private sector, dipped to 40.9 points in September, hitting fresh lows since the series began in January 2014.

Credit: Business Daily

Ghana Business News