On March 26, President Uhuru Kenyatta issued new measures to curb the spread of Covid-19. As the private sector, we commend the government for these measures. We, however, observe with concern that the current public health crisis has already devastated the local economy and these measures are likely to make matters worse.
The business sector is likely to record severe job losses and supply-chain disruptions, depletion of the supply of stock, increase in commodity prices, a slowdown in production and manufacturing activities and limited mobility of factors of production. Notwithstanding, the taxman will be expected to collect his dues from these suffering businesses.
The hotel and hospitality industries are some of the hardest hit by the lockdown. The uncertainty in the three industries is amplified by the number of events and meetings that have been cancelled or postponed. Little consideration has been given to the thousands of casual workers in hotels, bars and restaurants who lost their jobs after the presidential address.
The restriction of movement into and out of the one-zoned Nairobi, Machakos, Nakuru, Kiambu and Kajiado has disrupted the country’s supply chain as the five contribute to 60 per cent of the GDP. Inefficiency in the transport system, coupled with increased fuel prices, will disable the movement of supplies and raw materials to and from these counties. This might lead to increased cost of living and food shortages.
Our major concern is the disconnect between the situation envisioned by the measures and the experiences of resilient and hardworking Kenyans who were just about to revive their businesses. With the lockdown, their efforts will be rendered futile.
On behalf of the business community, we ask that certain measures be reconsidered and incentives given to businesses to ensure their continuity and sustainability. To improve financial support to businesses, we urge banks and other financial institutions to consider extending periods for repayment of loans. Additionally, the banks can consider moratoriums and commercial rates deferral and subsidies to ensure business assets are not auctioned for default.
We recommend the provision of economic stimulus to sustain small businesses whose lifespan is heavily threatened by the lockdown. This should prioritise the jua kali sector and other informal businesses. We recommend county emergency response committees to be reactivated and prepared to support ongoing trade and commercial activities. In addition, the provision of essential passes to qualifying business groups would ensure the continuity of inter-county trade.
To protect jobs, companies and employers should not lay off employees, but consider the possibility of them working remotely. As hotels, restaurants and bars are a big source of employment, we request that the decision curtailing their operations be revised. We recommend that the tourism, entertainment and hospitality industries be allowed to reopen and work within strict Covid-19 protocols. We also urge the government to reconsider the operation of local airlines.
We support the government's move to ensure adequate social distancing inside buses and matatus. We recommend that service operators work within the Covid-19 protocols and the vehicles be regularly fumigated and sanitisers provided. The increase in the cost of fuel has already led matatu owners to hike fares. We recommend that the matter be addressed so as not to overburden commuters.
We support the government position on the ban of large gatherings. We commit to reinforce positive behaviour among the business community to ensure the health guidelines are observed.
In order to flatten the curve faster, KNCCI requests that the lockdown be lifted, and the following strategy be adopted to curb the disease's spread.
(i) A lockdown of four days be imposed in Nairobi which has the highest positivity rate.
(ii) During the period, mass testing be conducted
(iii) Those identified as positive be isolated under home-based care or be taken hospital
(iv) Mass be going on vaccination alongside the testing.
(v) From the results of the mass testing, the county zones with the highest positive rates be marked as ‘Red’ zones, while the zones with lower rates of infection be marked as ‘Green’ zones. Those in the red zone should not move to the green zones and vice versa until mass testing, isolation and vaccination has been conducted.
(vi) After the process is completed in Nairobi, the same should happen in the other infected counties.
-Mr Ngatia is President, Kenya National Chamber of Commerce and Industry
