Extended holiday to cost economy dearly – experts
Kenya is expected to lose more than Ksh100 billion in revenues in this five-day long holiday on account of reduced productivity.
The repose comes as a result of government’s declation of a holiday after the death of former President Mwai Kibaki, then May 1 Labour Day and Idd Ul Fitr.
Analysts say that the country is losing so much revenue and man hours given that we just had a holiday last week.
“Holidays are quite too much for a poor country like ours, we don’t need so many holidays. These interruptions are too much,” said John Kirimi, former head of Sterling Capital.
Kenya’s annual gross domestic product (GDP) is estimated at Sh11 trillion which means Kenyans produce an estimated Sh30 billion a day which translates to Sh150 billion in the five days period.
The losses will come as result of business closures in banks, schools, courts, government offices and the Nairobi Securities Exchange (NSE), small businesses, factories and other investments.
Kenya’s economy is projected to grow at 5.7 per cent this year by the International Monetary Fund (IMF) amidst elections and inflationary pressure acting on oil, cooking oil, wheat and many other commodities.
However other businesses such as clubs, travel companies will make good business as people move into the holiday mood. This comes at a time when businesses are just recovering from the Covid-19 pandemic and new jobs are being created to cover for the massive job losses see in the last two years.
Kenya Association of Manufacturers added that employers who will be in operation will have to compensate their employees for keeping them working over the holiday season.
“There will be a cost implication for those that continue production during the public holidays. This is because, depending on a specific company’s human resource policies and existing labour laws, there has to be a mode of compensation,” said Phyllis Wakiaga, the CEO KAM.
During holidays people opt to stay in the house and there is very little business activity going hence causing losses to the economy. Historically Kenya’s economy underperforms during an election year meaning the country stands the risk of losing out even more.
This comes at a time when Cotu is pushing for a 23 percent rise in employee minimum wage next month which could see employers pay more to service their wage bills.
These could reduce employment creation as employers have to pay for days that worker did not work meaning there will be less money to hire new workers.
As employees celebrate a long weekend and holiday, employees are counting losses running into millions of shillings.