Stung by pandemic, executives want economy reopened

Phyllis Wakiaga, CEO Kenya Association of Manufacturers. She said the Association has consistently championed the adoption of critical tenets of sustainable development and green growth towards actualising a green economy. [Wilberforce Okwiri]

Captains of industry are optimistic of the economy re-opening after a devastating pandemic that has seen many sectors close down - causing major losses and affecting livelihoods.

This is even as President Uhuru Kenyatta hinted that the country cannot live under a curfew forever.

Chief executives, though optimistic of the re-opening, have called for caution to ensure the country does not face high infection rates and deaths that could see the imposition of stricter measures.

The country has for the last two months been experimenting with a degree of a lockdown.

This included the dawn-to-dusk curfew, cessation of movements into and out of some counties including Nairobi and Mombasa as well as a ban on international passenger flights into and out of the country.

The government has in the past claimed that these measures have had a degree of success.

There has however been a surge in the number of new coronavirus cases and President Kenyatta’s May 23 surprise announcement saw him task Cabinet Secretaries to advise Kenyans that they cannot live under a curfew forever.

Yesterday, the Head of State voiced the same concerns - and once again tasked cabinet secretaries to moot regulations that would see the tourism sector, which has been hit hard, resume operations in a safer manner.

Despite the intent to re-open the economy, there is a wary that it might signal Kenyans to resume normalcy. This might see a surge in Covid-19 cases - going by the recent number released by the Ministry of Health.

“We want life to go back to normal as quickly as possible so that people can continue with their lives and the economy can rejig itself and get back to where it was and people can get back to work,” he said in an interview with the local broadcaster on Sunday.

“At the same time, we are looking at recognising the very real danger that if we go back too fast and without a plan, we will be digging graves as we are seeing in other parts of the world where people have not taken this disease seriously. (We have to) balance between lives and livelihoods.”

Sharp rise

An analysis by US consulting firm McKinsey noted that African countries, many of them having instituted restrictions, especially in major towns and now considering re-opening, will need to strike a balance to prevent a sharp rise in Covid-19 cases when the economies re-open.

“African countries need to find smart approaches to re-open economies in a calibrated way that brings key industries back into operation while ensuring safe ways of working,”

“The Covid-19 crisis will likely persist for some time, and there is a serious risk of a resurgence in infections. Accordingly, governments will need to build the capacity to alternate between re-opening and restricting economies on a granular, local level — akin to developing and flexing a muscle.”

Local businessmen and traders who spoke to Financial Standard noted that the re-opening of the economy will require strict adherence to the World Health Organisation (WHO) and Ministry of Health regulations such as social distancing and wearing of masks while in public places.

Mohammed Hersi, the Kenya Tourism Federation Chairman noted that the tourism industry - one of the hardest-hit sectors, could not afford further restrictions but urged caution when re-opening the economy.

“As an industry, we can no longer afford continued restrictions, we need to start re-opening. Hotels and tourism businesses cannot remain closed forever and we are one of the largest employers in this economy,” Hersi said.

“We very much support the sentiments by the president that we cannot remain closed. We had to shut down initially because we did not understand the virus and there was a lot of unknown.

“But now, we know a bit about the virus – how it is spread and the effects - as well as our own preparedness, I think it is time we start opening.”

Hersi observed: “We want domestic flights and the SGR to start operating and other measures to enable hotels start receiving clients. We also want to encourage the government to support the industry by having ministries hold some of their meetings in their hotels.”

He, however, advised that the re-opening be done cautiously as Covid-19 is still a threat.

“We must do it with caution. We do not want people to behave as if the disease was just a passing cloud and things have now normalised. We cannot afford to continue closing down,” he said, adding that everyone must learn to live with the disease because “we do not have a choice. We have to stick to the guidelines,”

Kenya Bankers Association Chief Executive Habil Olaka termed the re-opening of the economy a delicate balancing act, noting that though restrictions have curtailed economic activities, they are necessary to curb the spread of the virus.

“There is a health as well as economic concern. The critical thing is that we need to balance the two because you can’t keep the economy locked down forever. We will get into a serious depression,” he said.

He added: “It is important that we do not grind the economy to a halt. We will start picking up some of the activities because we have to feed people.

“But we have to be careful that the disease does not spread again. The spread of the virus can easily bring whatever economic activities we are talking about to a halt again. You can’t have those economic activities with sick people dying.”

He called for the minimisation of old habits such as over-the-counter transactions and urged banks to manage queues while increasingly offering customers the options of digital banking.

“In the banking halls, you might see markings of where the people should be queuing. You will still see the continuation of existing protocols in terms of wearing masks and exercising social distancing, the general hygiene standards of cleaning the place, and ensuring that everything is sanitised,” Olaka said.

“Some essential physical access of the bank premises will be allowed. But you will still see that a lot of transactions will be pushed on to the digital platforms.”

Matatu Owners Association Chairman Simon Kimutai urged the country to exercise caution if it is going to ease the restrictions - at a time when the number of new cases is going up.

He noted that while the matatu industry is currently making huge losses and would be a major beneficiary of an economy with fewer restrictions, there are major risks of re-opening before the State and private sector prepare adequately.

“The government should only lift the restrictions if everyone is prepared,” he said, pointing at the rising cases in informal settlements.

“We need to understand that coronavirus is going to stay with us and we need to have skills to protect ourselves. There has been a loud song on washing hands, social distancing but are we all prepared? In places like Nairobi, masks should by now be given to the residents for free.”

“We should re-open but with caution. The government should seek advice from medical experts to tell us the level of preparedness we need and whether we are ready. We do not want a scenario where the system is overwhelmed in case there is a spike in infections and we cannot take care of the people. A lot of measures need to be in place.”

Kimutai noted that social distancing directives on the transport sector by the Health Ministry and the curfew had resulted in reduction of revenues by more than 50 per cent.

Business community

He, however, added that though the industry looks forward to increased traffic and more working hours once the economy is re-opened, both the business community and the State ought to be prepared to institute measures that will guarantee the country does not experience a spike in coronavirus cases.

“Matatus’ carrying capacities were reduced by about 50 per cent and revenues dwindled. Right now, we are making losses… we are not maintaining the vehicles to standards, we are no longer taking care of the depreciating factor of investment,” he said.

“In as much as we would want to get back into the business and make the money, we must be prepared. And preparation is not just the business community, the government must also play a big role… it must be prepared to provide protective measures and equipment.”

He cited the case of South Korea where the country had to shut schools after re-opening following a spike in new coronavirus cases.

Ben Woodhams, Knight Frank Managing Director, while rooting for the re-opening of the economy, urged organisations to stick to social distancing and other safety measures.

“The economy should be re-opened. We are back at work here at the Knight Frank office. We have two teams working on alternate weeks to maintain social distancing at the workplace. We are also providing consultancy services to other organisations to show them how to return to work safely,” he said.

Richard Ngatia, the head of Kenya National Chamber of Commerce and Industry, while calling for caution, advised that restrictions be lifted gradually.

“Maybe we should start by relaxing the curfew hours as the first step to the intended re-opening. An additional four hours would mean the productive sector is engaged a little longer while there is no rush to go home to beat the 7pm deadline,” he said.

“We hold the view that safety remains a priority and also appreciate the fact that life has to go on. People must have opportunities earn and at the very least be facilitated to meet basic needs.”

The Kenya Association of Manufacturers (KAM) too rooted for caution in re-opening the economy, saying the focus now shifts to lessons learned from the pandemic – particularly boosting local industries and reducing over-reliance on imports.

“The economy will follow the state of health and priority has been given to ensure that precautionary measures are in place to curb the spread of the virus,” KAM said in a statement.

“The Covid-19 pandemic has revealed the risk of over-relying on imported goods and therefore laying bare the need to support and develop local industry.”

The sector’s survival during and after this crisis, noted KAM, depends on the structures put in place.

“We expect that even after this crisis is over, the government shall put in place measures that drive development and the most effective adaptations and safeguards to economic activity with or without a pandemic.

“This means putting in place growth-oriented, stable and predictable policies that will encourage investments in all sectors of the economy.”

 

-Frankline Sunday, Wainana Wambu, Dominic Omondi, Macharia Kamau