Half of Kenya manufacturers plan to shed jobs on reduced orders and sales linked to jitters over the prolonged electioneering period and tension over the October 26 repeat presidential poll, a new survey reveals.
Kenya Association of Manufacturers’ 3rd Quarter Barometer says that 47 per cent of the industries plan to shed jobs over the next six months following lower than expected sales that has seen them cut production.
Looking ahead, 64 per cent of industrial manufacturers forecast zero or negative revenue growth in the next six months while two per cent expect positive revenue growth.
“Political uncertainty will adversely affect industries where profits will dip, with a further beating expected from rise in the cost of raw materials,” it said.
The Federation of Kenya Employers echoed the comments on Tuesday, adding that its members were shedding jobs in a business environment where production has dropped for the fifth month in a row, weakened by a constrained money circulation and dropping customer orders.
Reports indicate that investors are postponing projects on political jitters as both the opposition and the ruling parties have engaged in increasingly bitter rhetoric, sparking street protests.
Another 53 per cent of the industrialist say they do not intend to make new investments over the next six months, says KAM, adding that 75 per cent expect dip in profits.
The Supreme Court annulled Mr Kenyatta’s victory on September 1, citing procedural irregularities, and Mr Odinga has refused to take part in the October 26 poll, saying the re-run should not happen until major electoral reforms are made even as the IEBC insisted the polls will go ahead.
The standoff has frightened investors in the region’s most advanced economy and is slowing growth.
Credit: Business Daily