EXPERT COMMENT

Employers should not layoff staff

Apart from the grave health risks posed by coronavirus, the pandemic threatens our socio-economic well being. We are staring at a huge economic slowdown as our economy reels from the effects of the scourge.

In Summary
  • OUR Nation is grappling with an unprecedented crisis brought by the coronavirus pandemic. This international scourge threatens to penetrate the heart of our very existence.
  • Elsewhere in the world, most nations are at a lockdown as the crisis bites. We are at war, not against an adversary with lethal weapons, but against an unforeseen foe that threatens to cripple health systems and economies.
VP Kalonzo Musyoka
VP Kalonzo Musyoka

OUR Nation is grappling with an unprecedented crisis brought by the coronavirus pandemic. This international scourge threatens to penetrate the heart of our very existence.

Elsewhere in the world, most nations are at a lockdown as the crisis bites. We are at war, not against an adversary with lethal weapons, but against an unforeseen foe that threatens to cripple health systems and economies.

Apart from the grave health risks posed by the pandemic, the disease threatens our socio-economic well being. We are staring at a huge economic slowdown as our economy reels from the effects of the scourge.

 
 

Companies as well as small and medium enterprises (SMEs) face dire financial straits.  History has proven that, during such moments of crises, the most obvious “recourse” taken by employers is mass lay-offs.

I urge employers to avoid sacking their workers at this time and to consider alternatives such as unpaid leave. Every company or SME should come up with alternative mitigation measures other than complete shutdowns. 

With regard to the foregoing, I urge the Government to consider giving incentives to companies to mitigate the tough economic times.

Such measures may include tax breaks for between the next three to six months, so as to enable the companies to ride over the turbulence.

I am aware that, even without the painful consequences brought about by coronavirus, most Kenyans are in a debt cycle.

In the last couple of years, financial institutions have been reporting a huge spillover of non-performing loans. Yet, this situation is not as a result of deliberate refusal by Kenyans to honour their financial obligations, but rather due to inability to pay due to harsh economic times. Coronavirus has just made a bad situation much worse! 

I propose that lenders, including mobile (digital) money lenders, consider a three to a six-month moratorium on loan and mortgage payments.

 
 

Treasury CS Ukur Yatani may consider calling for a consultative meeting with the banks to discuss ways of cushioning the financial institutions from financial aftershocks.

Statement by Kenya Special Envoy to South Sudan