Kenya CEOs Project Job Cuts In 2024 As Sales Declines

• The Central Bank of Kenya (CBK) projected an economic rebound in the next 12 months to December 2024
• However, the growth prospects could be shattered by reduced confidence in business activities by sector players
• CBK chief executive officer's (CEOs) survey conducted in March 2024 showed that some fired workers between January to March 2024 on reduced demand for goods and sales

TUKO.co.ke journalist Wycliffe Musalia brings over five years of experience in financial, business, and technology reporting, offering deep insights into Kenyan and global economic trends.

Most Kenyans could lose their jobs in the coming months should business activities slow down.

A survey conducted by the Central Bank of Kenya (CBK) showed that 22.4% of company bosses fired workers in the first half of 2024.

The survey was conducted on chief executive officers (CEOs) of companies, with the majority attributing the restructuring to reduced demand and sales.

Which sector could reduce workers?

The manufacturing sector could be the worst hit in terms of sales, putting job seekers' hopes in limbo.

According to the report, business activity in the manufacturing sector remained subdued, largely due to the low consumer purchasing power and the increased cost of production coupled with the high cost of energy and credit.

"Production volumes were lower in the manufacturing and services sector largely on account of low consumer demand," the report read in part.

Out of 1,000 private company CEOs interviewed, 33.6% of the bosses highlighted a decline in sales from January to March 2024 compared to Q4 of 2023.

They registered low optimism in business activities in the Q2 of 2024, pointing to a further reduction in jobs.

What is reducing firms' business activities in Kenya?

The survey highlighted factors such as the business environment, increased taxation, the economic environment, and declining consumer purchasing power as the main domestic constraints to growth and expansion in the near term.

Other challenging external factors are energy prices, macroeconomic volatility, geopolitical tensions, and global increase in commodity prices.

"Most respondents in the manufacturing sector expect business activity to either remain the same or increase, largely driven by seasonality factors," the report continued in part

The report showed that most company bosses are operating below capacity and could utilize the idle capacity if there was an unexpected increase in demand.

Is there job growth optimism?

The CBK survey, however, noted optimism in job growth as the economy recovers.

Most of the firms surveyed plan to diversify their operations, improve efficiency, optimise costs, grow their businesses sustainably, and invest in talent and skills development in the next three years.

In an exclusive interview with TUKO.co.ke, Kenya Association of Manufacturers (KAM) Chief Operating Officer (COO) Tobias Alando explained that the sector plans to elevate its contribution to GDP to 20% by 2030.

Alando said this can be achieved through four pillars, namely, global competitiveness, export-led growth, SME development, and agriculture for Industry.

"In pursuit of this ambitious goal, KAM has been actively advocating for a conducive environment that enhances the competitiveness of locally manufactured goods in local and export markets as well as enhances collaboration between the government and the private sector," said Alando.

Alando further noted that the strategy seeks to create 1 million jobs, increase real value-added growth in manufacturing, and raise manufacturing contribution to total tax revenue.

CBK Monetary Policy Committee (MPC) projected a rebound in the 12 months to December 2024, supported by strong agricultural activities.

The regulator also cited the appreciation of the shilling against the US dollar and global economic growth as key factors contributing to growth.

Proofreading by Jackson Otukho, a multimedia journalist and copy editor at TUKO.co.ke