Mass sacking as firms downsize

• Companies blame post-poll chaos and the global economic crisis

However, the Central Organisation of Trade Unions (Cotu) has strongly criticised Kenyan employers for adopting “an escapist attitude” toward the economic outlook. The union accused employers of looking for scapegoats.

“The belief by employers that the economy might not improve soon is a big fallacy given that global fuel prices have gone down and the cost of electricity reduced, thus pushing down the cost of doing business,” said Cotu secretary general Francis Atwoli.

The violence that rocked the country early last year led to serious disruptions in the labour market. Thousands of workers were displaced during the mayhem, forcing firms to scale down their operations or shut down altogether for several weeks.

The violence also paralysed transport services, making it difficult for several companies to access their markets. Roadblocks in the Rfit Valley area caused severe shortages that forced up the prices of basic commodities and raw materials.

The most significant increase, which affected nearly all sectors, was the sharp rise in the price of oil. This translated into higher production and electricity costs that significantly slashed profit margins of most companies.

Paternity

But before local companies could recover, they were hit again by the on-going global recession that was set off by the failure of major financial institutions in the United States.

A survey conducted by FKE last year reported that the average additional cost expected per company as a result of enhanced maternity leave would be Sh9.2 million, while that arising from the new paternity leave would be Sh2.1 million.

As a result of a combination of these factors, the country’s economic growth rate slumped from 7.2 per cent in 2007 to 2.2 per cent in 2008.

Several analysts led by AIG Investments estimate that this year’s growth will be between 3 and 3.5 per cent.