Govt. downplays impact of private sector layoffs

The government has allayed fears of the impact of private sector layoffs and company closures.

With both local and international firms scaling back operations and sending thousands home to stay afloat, the government says continued foreign direct investment into the country is an indicator of sustainable growth.

According to Trade and Industrialization Cabinet Secretary Adan Mohamed, while a harsh operating environment has made times tough, the government is putting in place measures to minimize the impact and the cost of doing business.

“Whilst there have been instances of such closures, it is important to note that the steady growth of our economy that has averaged 6 percent has been way above the global average of 3 percent and this has led to massive growth of investments to over 300 percent over the past three years alone,” Mr Mohamed said.

Areas the government has highlighted include reduction in the cost of power and improving access to market.

“The government has been doing its part reducing cost of production by reducing the cost of power through increasing its supply, reducing cost of logistics by improving the efficiency at the Port of Mombasa,” he said

2016 was characterized by company layoffs as firms moved to cut costs and boost efficiency.

Kenyan firms have over the last decade engaged consultancy firms in an effort of restructuring operations that often leads to massive layoffs.

Mr Mohamed said government data indicated a strategic shift towards entrepreneurship with most opting to start their own businesses.

Entrepreneurship has been a common theme under the current government.

“Data from the Company Registry indicates that every day 200 businesses are registered translating to 50,000 businesses annually. In 2016 alone, over 300 medium size to large companies set up shop in Kenya according to statistics from the Kenya Investment Authority,” he said.

The government maintains Kenya is an attractive place to do business with foreign direct investment expected to flow into the country.

Report by Brenda Nyamichabaa