This archive report was first published on 21 May 2020.
As the world grapples with the COVID-19 pandemic, Kenyan manufacturers have been forced to change their priorities. According to a recent report by KPMG and the Kenya Association of Manufacturers, published on May 21, 2020, the sector has had to shift its focus from increasing profit and improving revenue to reducing costs, retaining jobs, and improving cash flow.
The report highlights that 78% of manufacturers' top priority is reducing costs, followed by job retention (61%) and improving cash flows (53%). On employment, 40% of surveyed manufacturers have reduced their casual employees, while 17% have reduced the permanent workforce.
Interestingly, 91% of non-essential manufacturers have seen a significant decrease in demand for their products, compared to 74% of essential goods manufacturers. Despite the rising costs, most manufacturers have adjusted their prices accordingly, as stated by Bobby Johnson, Chair of the Metal & Allied Sector.
"We have a moral obligation to ensure that at this particular time we won’t take advantage of the situation but be very supportive of our country, Kenya." – Bobby Johnson, Chair Metal & Allied Sector.
Manufacturers are now in survival mode, looking to maintain the status quo. However, despite fears of the impact of the pandemic on local industry, 81% of manufacturers say they are not likely to close as a result of the impact of COVID-19. To help businesses navigate the pandemic, the survey proposes several measures, including clearing outstanding VAT refunds and pending bills, re-evaluating tax reliefs, and establishing an emergency rescue fund.
