This archive report was first published on 21 May 2020.
Kenya: Manufacturers Shift Focus Amid COVID-19 Pandemic ¶
Published on May 21, 2020
Kenyan manufacturers are re-evaluating their priorities in response to the COVID-19 pandemic, with a focus on reducing costs, retaining jobs, and improving cash flow.
According to a report by KPMG and the Kenya Association of Manufacturers, 78% of manufacturers have made cost reduction their top priority, 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 their permanent workforce.
Non-essential manufacturers have been disproportionately affected, with 91% reporting a significant decrease in demand for their products, compared to 74% of essential goods manufacturers.
Despite rising costs, most manufacturers have adjusted their prices accordingly, according to 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," Johnson said.
Manufacturers are also switching to survival mode, with 81% saying they are not likely to close as a result of the pandemic. However, this number drops to 76% for manufacturing SMEs.
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.
Speaking during the launch of the report, KAM Chair Sachen Gudka noted that while regulations are necessary to curb the spread of the virus, they are likely to lead to a prolonged recession that will affect business continuity.
