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Kenyans a worried lot as virus causes 130,000 job losses

Thursday April 30 2020

coronavirus

Labour Cabinet Secretary Simon Chelugui addressing a press conference on coronavirus, at NSSF building, Nairobi, on March 23, 2020. PHOTO | LUCY WANJIRU | NATION MEDIA GROUP 

SAMWEL OWINO
By SAMWEL OWINO
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The reality of the toll Covid-19 is taking on the economy is only beginning to hit home, with 133,657 Kenyans said to have been rendered jobless.

The revelations are in a report tabled before a parliamentary committee on Tuesday that showed the pandemic continues to ravage companies by strangling their revenue streams.

The most affected sectors are transport, aviation, hospitality and tourism, manufacturing, wholesale and trade, agriculture and the informal sector.

The report, prepared by the Ministry of Labour and Social Protection, indicates that all the 133,657 lost jobs so far are in the formal sector and the number excludes employees on unpaid leave and those who have taken pay cuts.

The majority of those affected, the document says, are in the manufacturing sector, one of the pillars of the Jubilee administration’s Big Four agenda, where 500 workers have been laid off. The security sector has sent home 300 workers.

“The numbers are likely to rise because most companies are yet to notify the ministry on redundancies as required under the Employment Act, 2017,” reads the report.

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“Measures put in place to contain the spread of the pandemic have resulted in loss of jobs in key sectors of the economy. Also witnessed work-related fatalities and casualties involving employees in key organisations offering essential services,” the report says.

DISTRESS CASES

About 300,000 workers in the tourism sector are also staring at possible job losses in May and June if the situation does not improve, as they have already been sent on unpaid leave since the beginning of this month.

In the horticulture and floriculture industry, 50,000 workers have been sent on unpaid leave while 900 others from four different firms have been given redundancy notices.

In the transport sector, 90,600 people have been affected following restrictions on movement in and out of Nairobi, Mombasa, Kwale and Kilifi counties.

About 58.1 per cent of Kenyans in informal employment have been affected because most of their businesses rely on imports from China, which has been under lockdown.

“The pandemic has affected labour migration management across the globe because of restrictions in travel and lockdown,” reads the report.

The main reasons given for the loss of jobs, the report says, include reduced revenues, loss of business opportunities, loss of markets for goods and services, shortage of raw materials and restructuring due to the tough economic times.

Kenyans working abroad have also been affected by the pandemic, with the ministry telling MPs that it has received 247 distress cases, mainly from the United Arabs Emirates and Saudi Arabia.

“The distress situation includes non-payment of salaries, health and restricted movement,” reads the report.

UHURU'S INTERVENTION

The ministry told the committee that the government has held several meetings with various stakeholders and they have identified interventions to minimise and avert job losses.

The ministry says workers should take their annual leave, take leave on half pay or unpaid leave in some instances.

The report on job losses comes just four days after President Uhuru Kenyatta signed into law the 2020 Tax (Amendments) Bill that directed, among other measures, that employers be barred from sacking their workers or forcing them to take pay cuts during the Covid-19 pandemic.

The National Assembly’s Finance and National Planning Committee recommended that employers struggling to pay salaries due to drastic drops in revenue streams can only grant unpaid leave days to their staff during the period of the pandemic.

“Where the Covid-19 pandemic has adversely affected the ability of an employer to pay salaries or wages, the employer shall not terminate a contract of service or dismiss an employee or coerce an employee to take a salary cut,” reads the law.

The bill was among several measures President Kenyatta announced last month to cushion millions of Kenyans from the economic meltdown caused by Covid-19.

IMPACT ASSESSMENT

Many companies have already directed their workers to take pay cuts or have sent staff on unpaid leave, while others have said they will have to lay off employees due to hits to their cash flow.

The 2020 Economic Survey released on Tuesday indicates that almost all segments of the economy in 2019 recorded a dip in growth, save for the financial services sector.

National Treasury Cabinet Secretary Ukur Yatani said the ministry is planning to undertake studies in the various sectors of the economy to assess the impact of Covid-19.

He said this year’s economic performance will depend on how long the Covid-19 pandemic disrupts lives and businesses.