Kenya: Coronavirus Claims 30,000 Jobs in Manufacturing Sector

Workers at a paint factory showroom in Industrial Area, Nairobi on May 6, 2020.

More than 30,000 formal jobs have been lost in the manufacturing sector and 80 per cent of the existing jobs are vulnerable as the Covid-19 pandemic continues to bite.

Manufacturers now say the job situation remains grim as the stimulus package the government unveiled takes longer to create the desired impact in the disrupted business environment.

In a report set to be launched today, the jobs assessment also contains several recommendations on how to keep one of the key pillars of President Kenyatta's Big Four agenda alive.

The retail, agriculture, beverages and textile sectors create the largest number of jobs and contribute up to 60 per cent of the manufacturing sector gross domestic product.

INDIRECT JOBS

Kenya Association of Manufacturers (KAM) chairman Sachen Gudka did not readily disclose details of the report he called, "a feel on the pulse of the sector".

The Daily Nation had, however, obtained recordings of a webinar Mr Gudka held with Stanbic Bank East Africa regional economist Jibran Qureshi on the effects of the coronavirus on the manufacturing sector in which he gave several preludes to the report.

"Manufacturing sector has about 330,000 direct and three million indirect jobs. We have already lost about 30,000 formal jobs and another 140,000 or so remain vulnerable if the Covid-19 situation persists. There is even bound to be more distress if the current liquidity challenges facing many businesses continue unaddressed," he said during the one-hour video conference.

The report that KAM prepared together with audit firm KPMG found that between five and eight out of 10 jobs have been impacted by the pandemic with employees working less, taking pay cuts or on the verge of losing their jobs.

In the informal sector about half or at least 1.8 million workers face the risk of becoming jobless as manufacturing machinery grinds to a halt with subdued demand and slow business.

RETAIL SECTOR

The agriculture sector, which employs about 294,000 formally and about 3.4 million informally, has not been spared either with about 40 per cent of workers now risking job losses. The sector, which is largely subsistence will lose less jobs in the informal sector with just 10 per cent expected to be impacted.

The retail sector, largely small and medium enterprises, which and employ about 259,000 in the formal sector is also expected to take a 60-70 per cent hit, the same percentage under threat for its 6.8 million informal employees.

The impact is even greater on the food products, tobacco, beverages and the textile sector where most employees have already gone home as restaurants shut down and bars remain shut.

Personal care products like lotion and automotive products like fuel and lubricants have also been heavily impacted as government moved to restrict movements.

The KAM boss, however, said some sectors have received a major boost during the pandemic as their products gained more relevance.

"Those dealing in food, home care, bleaches, detergents, plastics and sanitisers have had a better season, but nothing compared to the hit experienced by businesses like book printing which is at zero as construction is also reduced significantly," Mr Gudka said.

In the report, the manufacturers are going to ask for various interventions, some with revenue impact to the government already constrained by low tax yields. The interventions include 10-50 per cent wage subsidies for some sectors hard hit by job losses like the apparel which may have to send thousands home.

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