Lobby groups: Political climate in Kenya hurting business activities

Private businesses lost about Sh700 billion in the past four months as Kenya weathered a heavy political storm that preceded and followed the inconclusive presidential election, a lobby group said on Tuesday.

The Kenya Private Sector Alliance (Kepsa) said most of the losses came from frequent disruption of transport and industrial operations during the campaigns ahead of the August 8 General Election and protests that followed the Supreme Court’s nullification of the presidential election.

Investors at the Nairobi Securities Exchange topped the list of losers – having lost Sh227 billion paper wealth in the past six weeks. Market capitalisation dropped from Sh2.54 trillion on August 25 to Tuesday’s Sh2.31 trillion offering yet another measure of the ongoing erosion.

Kepsa Trustee Patrick Obath said in a statement that wholesale and retail businesses have been hard hit by political protests that have become frequent in recent weeks – fearing looting and destruction of their property.


“The harsh political climate has serious implications as medium, small and micro-enterprises employ about 85 per cent of Kenya’s labour force. The education sector has also had its calendar disrupted and national examinations could suffer if the current political situation is not managed properly,” he said.

Kepsa’s statement was in line with the Kenya Association of Manufacturers’ (KAM) 3rd Quarter Barometer, which said most factories were operating at half capacity with 47 per cent of those managers indicating possible layoffs if the situation persists. More than 53 per cent of the industrial firms have also deferred expansion plans with 75 per cent expecting a further dip in profits, the KAM report said.

The Federation of Kenya Employers, another private sector lobby, said its members were shedding off jobs as a survival tactic in the wake of constrained circulation of money and sharp reduction in customer orders.

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