21 June 2014

Kenya: Business Community Asks for Sh2 Billion Disaster

The Kenya National Chamber of Commerce and Industry now wants the government to set up a national disaster fund for businesses with an initial investment of at least Sh2 billion.

KNCCI's chairman Kiprono Kittony on Friday said the incremental fund would help businesses recover from costly external and internal aggression that has increased over the last two years.

Most businesses, he said, were yet to be covered against such unforeseen acts, including terrorism, which they have become increasingly vulnerable to.

The deadly events of September 21 mid-day terrorist attack at Nairobi's upmarket Westgate Shopping Mall and night attack on businesses at Mpeketoni trading centre last Sunday underscore the urgency of such a fund.

Cumulative business losses emanating from such acts have not been adequately quantified but are estimated to run into tens of billions for Westgate and hundreds of millions for Mpeketoni.

"We think it's the right time that government considers creating a fund ... to help businesses get back on their feet after incidences like those in Mpeketoni," Kiprono told a Press briefing on Friday.

"That depends on available resources in the Exchequer, but it should not be less than Sh2 billion."

The chamber further sounded warning bells over looming economic slowdown.

KNCCI's vice chairman Laban Onditi said businesses across the country are scaling down sales orders owing to uncertainties over July 7 (popular as Saba Saba) - a day the Opposition has threatened a showdown if the government fails to convene a national dialogue forum with it.

KNCCI joins the Federation of Kenya Employers in rebuffing unrelenting calls for a public holiday in blatant disregard of Article 9(3) of the Constitution. It supported FKE on the resolve to sack those who will abscond duty on July 7.

"The situation we are in is like a double-edged sword which cuts both ways. If you think you are causing trouble ... (it) will turn around and fix you as well," the chamber's Mombasa county branch chair James Mureu said.

Already, the tourism sector, Kenya's third-largest foreign exchange earner after tea and remittances, has been hit hard with direct and indirect job losses estimated at about 300,000 by the Kenya Association of Hotelkeepers and Caterers

KAHC's chief executive Mike Macharia, also vice chair of the government-led National Crisis Management Committee for tourism, said on Wednesday that sector players are considering structured unpaid leave for some staff pending a rebound.

"If the business continue to incur losses ... there would be layoffs. But our position as a chamber is that we need to do everything possible including taking advantage of incentives given by the budget," Kittony said.

National Treasury Cabinet Secretary Henry Rotich has proposed to amend the Income Tax Act "to allow deduction of expenditure paid by the employers" who heed the government's rallying call to sponsor staff on domestic vacation.

Rotich said this will cost the taxman Sh2.4 billion in exchange for 300,000 additional domestic tourists over the next one year.

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