PERAK has warned of massive layoffs following the cancellation of licences of bars, restaurants and nightclubs situated in residential areas.
Pubs Entertainment and Restaurants Association of Kenya national chairman Michael Muthami estimated that half of the full-time staff employed in affected bars, or some 13,000 employees will lose their jobs.
In a statement, Muthami estimated that these employees earn about Sh390 million a month.
“PERAK further estimates that 100 per cent of temporary employees will not be required due to the reduction of operations within clubs. Some 73,000 jobs representing Sh1.6 billion monthly income will be lost in Nairobi,” he said.
Muthami said the ban is likely to take bars back to the situation witnessed when Covid-19 pandemic hit the country, where overall consumption of alcohol declined by 30 per cent.
“The decline was evidenced by a 6.4 per cent drop in domestic excise tax collection according to KRA’s 2019-2020 full year performance results,” he said.
The official added that the ban is coming at a time when consumers have constrained disposable income compounded by high alcohol taxes, which he said had fuelled high level of illicit liquor trade.
“In addition the ban will have a negative value chain impact on small holder farmers and local suppliers who provide raw materials for manufacturing,” he staid.
The association said bars in Nairobi directly employ more than 60,000 people who jointly earn Sh21.6 billion in terms of employment income.
“For each person the industry employs directly, 32 indirect jobs are generated in the wider economy, that is 1,920,000 jobs within the bar eco-system in Nairobi alone,” it said.
It named examples of indirect jobs created around the bar ecosystem as food supply business, security -including bouncers, automotive services, boda boda operators, cab services and mobile money services.
Nairobi Governor, Johnson Sakaja, on November 25, banned night clubs from operating in residential areas.
Sakaja cancelled the licenses issued and ordered his officers not to renew the permits for the aforementioned facilities.
The association said 400 outlets or 3.3 per cent of bars in the city are licensed as night clubs.
“It is estimated that each of the 400 night clubs in Nairobi employs 50-80 full time staff (total average of 26,000 people) and 20-30 temporary employees (an average of 10,000 people),” the association said.
It said full time employees earn an average of Sh30,000 per month while temporary ones take home an average of Sh10,000 per month.
“Therefore, full time and temporary employees in total earn a total of Sh780 million and Sh100 million every month respectively,” the association added.
The association said Nairobi county has some 12,000 licensed bars (30 per cent of the total bars in Kenya).
