Tuesday, February 05, 2008
KENYA'S ECONOMY IS IN ICU- 200 CEOs SAY!
Heed the call from captains of industry
Published on February 6, 2008, 12:00 am
When more than 200 CEOs came together on Tuesday, they asked political leaders to resolve the post-election crisis or else drive the economy to a halt.
And they are right. Investor confidence is low and some are contemplating relocating. Once they move, there is no guarantee that they will come back soon. As a result, many workers will lose jobs.
Before the political chaos, tourism was booming but it is now on its knees with more than 10 tourist hotels at the Coast closed. In major urban centres, including Nairobi, hotel bed occupancy is below 20 per cent because conference tourism has reduced.
In the hospitality business, more than 20,000 jobs are under threat. Another 120,000 people who indirectly depend on the sector are also likely to lose their livelihoods.
Manufacturers are operating at between 40 and 50 per cent capacity because the market is inaccessible and some employees have not resumed work. They rely heavily on the Comesa market for its exports, Uganda being the biggest.
But due to the transport crisis on the Nairobi-Busia highway, goods cannot be moved smoothly. Rail transport has been paralysed after sections of the line were vandalised.
Politicians across the divide might argue that the economy will recover as it has always done after years of recession. After the 1997 Likoni clashes, tourism nearly collapsed, but seven years later, it raked in Sh47 billion. However, the captains of industry warn that the global market has changed and countries compete to attract investment through generous incentives.
Neighbouring countries have suffered due to the skirmishes and are shouting for everybody to hear that they could seek alternative ports and routes to transport their goods.
The CEOs join millions of Kenyans and friends, locally and abroad, in calling for political stability with proper governance.