COVID-19

Coronavirus impact continues to weigh down businesses- report

The survey shows tourism sector is still the hardest hit with a 95 per cent impact due to the various travel restrictions

In Summary

•The transport sector which is also a major contributor to the GDP reported average loss of Sh30 million per company

•The survey noted that 46 per cent of firms across all sectors retained their employees amid the pandemic.

A customer at a kiosk in Westlands, Nairobi yesterday
A customer at a kiosk in Westlands, Nairobi yesterday
Image: ANDREW KASUKU

At least 81 per cent of enterprises across all sectors have continued to be affected by the coronavirus, according to the April 2020 Kepsa survey.

2,466 firms participated in the survey of which 29 per cent were micro, 46 per cent small, 16 per cent medium and nine per cent large enterprises.

“Small and mid-sized companies reported the largest impact (high to very high) at 85 percent and 83 per cent respectively in comparison to 78 per cent of micro-enterprises and 70per cent of large companies,” Kepsa says in the report.

The survey shows tourism sector is still the hardest hit with a 95 per cent impact due to the various travel restrictions.

 
 

The sector reported average losses of Sh30 million per company 81 per cent of agriculture firms reported a high impact from the virus recording average loss of Sh20 million per company.

According to Kepsa, the sector, which is a dominant contributor to the GDP will have a significant adverse effect on the economy.

The transport sector which is also a major contributor to the GDP reported an average loss of Sh30 million per company.

"The losses are disconcerting in the tourism and transport sectors where a majority of respondents are micro and small firms," said Carol Karuga, CEO Kepsa.

The survey noted that 46 per cent of firms across all sectors retained their employees amid the pandemic.

The finance and insurance sectors had the highest retention of employees with 93 per cent respondents reporting keeping all employees.

The sectors most affected by job losses where 20-40 per cent were able to retain employees were construction, agriculture, forestry, fishery, security, sports, art, creative and tourism.

 
 

Government stimulus measures such as reduction of VAT, Paye, and corporate tax are expected to benefit the largest number of businesses.

However, payment of pending bills and Vat refunds remain key points of concern, affecting the ability of businesses to meet financial obligations and overall liquidity.

Most businesses sought government support in form of grants or cheap accessible loans to cover operating costs, especially salaries.

Kepsa urged the government to offer support to the private sector to ensure viability when the pandemic ends.

The Alliance partnered with flower farms in the flowers of hope project to support the floriculture sector during these hard times.

With Europe and other markets beginning to open up, the horticulture sector will begin to become active as it seeks to meet the demand, but the cost of freight remains the challenge for this sector.