INSTABILITY

South Africa unrest likely to impact Kenyan firms, professionals

Manufacturers and the chamber of commerce are concerned.

In Summary

•More than 100 people are feared dead as violence continues across the country following the jailing of former President Jacob Zuma.

•Crowds have been looting malls and businesses as locals clash with police in different cities, with fears of a return of xenophobic attacks.

People loot an area near a burning warehouse after violence erupted following the jailing of former South African President Jacob Zuma, in Durban, South Africa, July 14, 2021.
People loot an area near a burning warehouse after violence erupted following the jailing of former South African President Jacob Zuma, in Durban, South Africa, July 14, 2021.
Image: REUTERS

The ongoing unrest in South Africa is likely to affect trade and tourism between the two countries with Kenyan professionals being exposed to job losses, the business community has said.

More than 100 people are feared dead as violence continues across the country following the jailing of former President Jacob Zuma.

Crowds have been looting malls and businesses as locals clash with police in different cities, with fears of a return of xenophobic attacks.

While Kenya's major African market is withing the East African Community (EAC), trade with the Common Market for East and Southern Africa (COMESA) will be impacted, the Kenya Association of Manufacturers(KAM) has said.

“The unrest is of concern to trading partners because trade and investment thrives in a secure and predictable environment. If it continues, it shall affect trade between Kenya and South Africa, and the region as a whole,” KAM chief executive Phyllis Wakiaga told the Star.

She said the unrest will affect exports to South Africa with impact expected to be felt much more at company level (Kenyan companies).

The Kenya National Chamber of Commerce and Industry (KNCCI) has expressed concerns Kenyan professionals based in South Africa are exposed to job losses, with individual businesses, not only Kenyan, being affected.

“There are a lot of Kenyan professionals in South Africa whose job security is affected with the riots,” KNCCI chief executive (Coast chapter) James Kitavi said.

South Africa is also among Kenya's top 30 international tourist market sources.

In the six months to June, international arrivals from South Africa totaled 6,799, Tourism Research Institute data shows.  

Kenya mainly exports gold, fresh-cut roses, medium oils, fermented tea, and printing machinery to South Africa.

Others are crab, keys, wood, natural uranium, friction materials, central heating radiators and electric lamp assembling parts.

Iron and steel are among the biggest imports from South Africa.

Others are vehicles, mineral fuels, oils, distillation products, machinery, electronic equipment, beverages, spirits and vinegar among other products.

Imports have however in recent times dipped to a 12-year low mainly on reduced orders for iron and steel products.

This is as a result of a slowdown in public expenditure on infrastructure.

The value of goods ordered contracted 35.81 percent to $432 million (Sh46.7 billion, Kenya Revenue Authority data shows.

Kenya has a potential of reaping up to $6 billion (Sh 649.2 billion) from the South African market but the trade volumes remain low, as the big focus remains on the EAC community and Asian markets of China and India.

People loot an area near a burning warehouse after violence erupted following the jailing of former South African President Jacob Zuma, in Durban, South Africa, July 14, 2021.
People loot an area near a burning warehouse after violence erupted following the jailing of former South African President Jacob Zuma, in Durban, South Africa, July 14, 2021.
Image: REUTERS