Over one million rendered jobless in Kenya as Covid-19 takes toll on businesses

Friday June 5 2020

A busy section of the Nairobi central business

A busy section of the Nairobi central business district. The impact of social distancing, dusk-to-dawn curfew and closure of businesses has impacted on consumer spending, leading to job cuts and unpaid leave for workers as firms race to cut costs. FILE PHOTO | NATION MEDIA GROUP  

PAUL WAFULA
By PAUL WAFULA
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At least one million Kenyans have lost their jobs or have been put on indefinite unpaid leave as the Covid-19 pandemic morphs into a major jobs crisis.

Multiple interviews and a compilation of public data from some of the companies suggest that the numbers could be higher, especially when casual labourers are factored in.

The massive job haemorrhage from the Covid-19 pandemic has thrown Kenya into one of the worst employment crises it has faced.

The Chinese contractor building the Standard Gauge Railway (SGR) sent 4,013 Kenyans and 471 Chinese expats on unpaid leave due to the coronavirus crisis.

The worst-hit companies are in the tourism, transport, horticulture, communication and education sectors.

At Kenya Airways, there is a thick cloud of helplessness as its more than 4,000 employees wait for a government bailout and the lifting of travel restrictions. The pay of a majority of its staff was cut by 75 per cent.

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“If you are in a department where there is no work, such as pilots and cabin crew, you will stay at home the whole month. But engineers report for one week and are on leave the next, since aircraft have to be maintained even when parked,” a member of staff said.

In March, Bridge International Academies sent hundreds of teachers and other staff on compulsory leave.

The low-cost private school chain told its staff through an internal memo that they should consider the leave as a “temporary lay-off” during which the organisation would not expect them to work and it would not be obligated to pay salaries.

The pain of the firm’s staff is shared by others in more than 1,932 private secondary and 8,000 private primary schools in the country who have taken similar or worse actions.

Jointly, private schools employ hundreds of thousands of teachers and other support staff such as security guards, clerks, receptionists and messengers.

“Private schools entirely depend on the school fees paid by parents, meaning if this pandemic continues, most of these schools will cease to exist,” Private Schools Association chief executive Peter Ndoro warned in a recent interview.

Mr Evans Muriu, a communication manager at SecurKenya Group Ltd, which employs more than 1,000 guards, says because of the pandemic, its key clients, among them hotels and malls, have cut down on their operations. This has left hundreds of security guards without jobs.

“When hotels shut down, the guards were released,” Muriu said.

“When malls got reduced foot traffic, they reduced the number of guards. It has been very strenuous for the company and guards, some of whom have not worked for over two months.”

To help them cope, the company’s managing director has been doing some shopping for the affected guards.

“We feel it is important for fellow employers to be compassionate and lend a hand to the employees,” Mr Muriu said.

Before the Covid-19 crisis, the private security business, with more than 2,000 firms, was thriving as various establishments hired guards to secure their premises.

Available estimates indicate that the sector employs as many as 700,000 guards, making it the biggest employer in the country. Now, a majority of these men and women have been rendered jobless.

The horticultural sector was also doing fairly well and employed over 150,000 Kenyans directly and another 500,000 indirectly. A majority of these jobs are now on the line.

According to the Alcohol Beverages Association of Kenya, bars previously employed over 250,000 people, many of them on a daily wage. The association’s chairman said closing them has jeopardised their support for over two million livelihoods.

For two weeks now, the Nation has tried to get new Labour Cabinet Secretary Simon Chelugui to provide an official number of those who have lost jobs in the country. He did not pick up our calls or respond to several messages sent to him.

Companies are required to report to the ministry before carrying out any redundancies.

During Labour Day celebrations, President Uhuru Kenyatta said that more than half a million Kenyans could lose their jobs in the next six months due to the Covid-19 pandemic. He added that workers in the informal sector and casual labourers were the worst-hit.

But nothing can best illustrate the pain of employees and the unemployment crisis than last week’s decision by the Fairmont Norfolk, an iconic hotel in Nairobi, to shut down indefinitely and fire all employees.

“Due to the uncertainty of when and how the impact of the global pandemic will affect the business picking up in the near future, we are left with no option but to close down the business indefinitely,” the firm’s country manager Mehdi Morad said in a memo. This means that several other hotels it operates, among them Movenpick, could face a similar fate.

The announcement, which sent chills through the job market, did not shock players in the hospitality industry who have taken similar actions quietly, or are considering them.

Tribe Hotel, Ole Sereni and DusitD2, all in the capital Nairobi, stopped operations days after the government imposed travel restrictions and social-distancing rules.

Many five-star hotels that rely on tourism, events and conferences have sacked their casual staff and put their permanent staff on indefinite leave. Very few have been lucky to remain on reduced pay.

Last week, East African Portland Cement Company (EAPCC), majority owned by the National Treasury and pensioners, announced a voluntary early retirement programme as part of a continuing staff rationalisation plan.

The cement maker’s acting managing director Stephen Nthei said the programme is a one-time event open to all employees.

“The industry has witnessed a significant decline in productivity, resulting in depressed revenues and manpower utilisation, leading to unprecedented job losses,” Mr Nthei said.

EAPCC is among several companies that started retrenching staff before the virus, which has made a bad situation worse in the country. These include Tuskys supermarkets and Shoprite supermarkets, which fired 104 staff after closing its Waterfront branch in Karen.

But there is a glimmer of hope.

On Wednesday, Kenya Airways’ low-cost subsidiary Jambojet announced it has put in place safety plans in anticipation of launching its flights next week.

Acting chief executive Karanja Ndegwa said the measures include thoroughly sanitising aircraft before and after each flight, as well as paying extra attention to all heavily touched areas. The aircraft have also been fitted with high-efficiency particulate air filtration systems that refresh the air every three minutes.

“Once we resume operations, we will ensure that we continue to follow the guidelines set by the Ministry of Health, WHO, IATA and other relevant bodies,” Mr Ndegwa said.

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