This archive report was first published on 12 May 2020.
As the COVID-19 pandemic continues to wreak havoc on the global economy, Kenya's manufacturing sector has been severely impacted, resulting in the loss of over 30,000 formal jobs.
According to a report by the Kenya Association of Manufacturers (KAM), prepared in collaboration with audit firm KPMG, the sector has been severely affected, with 80% of existing jobs vulnerable to job losses.
The report, which is set to be launched today, highlights the grim job situation in the manufacturing sector, with the retail, agriculture, beverages, and textile sectors being the hardest hit.
These sectors, which create the largest number of jobs and contribute up to 60% of the manufacturing sector's gross domestic product, have seen a significant decline in employment opportunities.
Kenya Association of Manufacturers (KAM) chairman Sachen Gudka noted that the manufacturing sector has about 330,000 direct and three million indirect jobs, with 30,000 formal jobs already lost and another 140,000 vulnerable to job losses if the COVID-19 situation persists.
"Manufacturing sector has about 330,000 direct and three million indirect jobs. We have already lost about 30,000 formal jobs and another 140,000 or so remain vulnerable if the Covid-19 situation persists. There is even bound to be more distress if the current liquidity challenges facing many businesses continue unaddressed," he said during a webinar with Stanbic Bank East Africa regional economist Jibran Qureshi.
The report also highlights the impact of the pandemic on the informal sector, with about half of the 1.8 million workers facing the risk of becoming jobless as manufacturing machinery grinds to a halt.
The agriculture sector, which employs about 294,000 formally and about 3.4 million informally, has also been severely impacted, with about 40% of workers now risking job losses.
The retail sector, largely small and medium enterprises, which employ about 259,000 in the formal sector, is also expected to take a 60-70% hit, with its 6.8 million informal employees under threat.
The report recommends various interventions, including 10-50% wage subsidies for some sectors hard hit by job losses, such as the apparel sector, which may have to send thousands home.
