At this point it is clear to all and sundry that the Kenyan business environment is not conducive despite government assurance. The cost of basic commodities is on an upward trajectory while flow of money has reduced significantly.
The best indicator that all is not going well lies in firms’ massive retrenchments and shutting of operations all over. Affected companies cite cheap imports, high cost of doing business and declining sales as the chief reasons for laying off workers or closing operations across the country. Here are some affected companies.
Softa Bottling Company
The beverage company was best known as the local brand that took on global beverages giant Coca-Cola and gave them a run for their money. However, the company’s owner Mr. Peter Kuguru put it up for sale late last year, citing financial difficulties and failure to secure a joint venture partner.
The tyre manufacture closed shop in September 2016, citing competition from cheap imports. Currently, the company outsources tyres from China and India, where the cost of production is comparably cheaper.
Nakumatt’s woes started showing early last year when the home-grown retail giant came out to look for a potential investor. Since then, things have been going south for the once enviable icon of Kenyan economic muscle in the region.
It has since shut operations across towns in Uganda and Kenya. Most recently, it’s branch at the Junction Mall, Nairobi, was shut again after a court order halted an earlier attempt.
Woolworths is a South African luxury fashion brand known to stock high-end attire. The fashion retailer closed its store at the Thika Road Mall earlier this week. Woolworth’s manager for East and West Africa, Caroline Musei, attributed the closure to dwindling sales. She also pegged reduced sales on Nakumatt’s woes. Nakumatt is the anchor tenant at the mall.
Ecobank had earlier said that it will send home an unspecified number of employees following the lender’s decision to close 9 out of 29 branches in Kenya. These include Gikomba, Ongata Rongai and Thika Road Mall.
Barclays had earlier issued a statement that beginning of this month, it will close seven branches and relocate operations to nearby branches. The lender has already rolled out a “voluntary early retirement scheme” that will affect 130 staff. Barclays had retrenched 171 workers by the end of last year (2016).
Equity Bank has retrenched 400 employees since January. The lender had retrenched 660 employees in what it termed “voluntary” exits.
These closures and mass retrenchments in Kenya’s banking sector are attributed to increasing wage bills, toxic loans and falling share prices in Nairobi’s Stock Exchange.
Other companies that have closed shop and/or sent workers home due to tough economic times include Coca-Cola, Kenya Airways, Bank of Africa, Standard Chartered Bank, Eveready, Cadbury, Unilever, Procter and Gamble, Reckitt Benckiser, and Postal Corporation of Kenya.