Political jitters hurting Coast's key economic sectors

The political crisis in the country has negatively affected businesses including car importation, hospitality sector and investor confidence at the Coast.

Players in the three main sectors driving the region’s economy said hard-line stances taken by rival politicians has created more confusion as the country gears up to the October 26 repeat polls.

READ: Political uncertainty hurting jobs, employers say-VIDEO

They urged opposition leader Raila Odinga (Nasa) and President Uhuru Kenyatta (Jubilee) to hold talks to save the situation.

Kenya Association of Hotelkeepers and Caterers (KAHC) Coast branch executive Sam Ikwaye said political rhetoric and the ongoing protests by the opposition were destroying Kenya’s credibility as a tourist destination.

“Bad politics is not good for tourism and volatile environment is not conducive for tourists hence affecting the industry.

"Political utterances and protests have hampered investor confidence. Tourists are withholding their money until the environment is safe,” said Mr Ikwaye told the Business Daily.

Shut down

He warned that if the situation persists, hotels will shut down due to lack of customers and hundreds of workers will be rendered jobless.

Mr Ikwaye said some hotels have had bookings cancelled especially conferences, adding that domestic tourism is also on the verge of collapse.

He said the region was gearing up for high peak travel season but the political uncertainty will negatively affect it.

“Kenya risks being slapped with travel advisories if the demos continue. Farmers will also be affected because they will have no market or hotel to supply their produce. My advice to Kenyans is to stop giving politicians credibility,” he said.

A Kenya National Chamber of Commerce and Industry official, Rukia Rashid, said traders were worried.

“Will we have a country in the next two weeks if the situation doesn’t change? The demonstrations are worsening the situation. We need peace,” she said.

60pc drop

The Car Importers Association of Kenya (CIAK) chairman, Peter Otieno said pressure and political height has reduced the importation and sale of motor vehicles by 60 per cent.

“September, October, November and December is always a high peak season for our business. 15,000 plus vehicles can be imported in the month of December alone but right now Kenyans are not buying vehicles,” he said.

He said 83 importer showrooms are feeling the impact.

However activity at the Mombasa port, which serves landlocked Uganda, Burundi, Rwanda, the Democratic Republic of Congo and South Sudan, has not been disrupted.

Kenya Ports Authority spokesman Bernard Osero said the political situation has not disrupted the flow of trucks of cargo at the port.

“The offtake is normal and we pray they don’t go to those levels. We have trucks coming to pick up their cargoes and customers clearing their goods. The systems are on, ships are coming and workers are working.

"The demonstrations have not disrupted our businesses they are remote and far away from our business,” he said.

READ: NSE investors lose Sh15bn as IEBC demos intensify

Election uncertainty

During the August 8 elections, business slowed at the port as transporters pulled their fleet off the road over post-election uncertainties.

Fears of unrest heightened when Mr Odinga disputed the tallying of the vote. Concerns over the impact of a disputed poll saw a low turnout of transit trucks.

“During voting day and Thursday we recorded a low turnout of trucks. But all the 21 berths have been occupied and we are offloading ships,” said Mr Osero.

“Few trucks are coming in. We need to see more trucks, we are on duty. But we have started seeing a few trucks trickling in. We are monitoring the situation. Documentation is going on as usual. We cannot specify which country they are from because there are very few trucks coming in,” he said.

At the height of the 2007-08 post-election violence, importers in Kenya and within the region incurred massive losses after their cargo was either delayed or stolen along the Northern Corridor route.

Uganda, Rwanda, the DRC and South Sudan were starved of supplies with parts of the Northern Corridor cut off and the railway line vandalised. The violence led to shortages of commodities in the countries, pushing up prices.
Scale down production

Most businesses at the Coast have scaled down production as investors hold onto their finances pending the uncertainty of the repeat presidential elections.

“Businesses are already suffering as a result of the protests,” Mr Richard Onsongo, the chairman of the business community in Kwale, said

He urged the two President Kenyatta and Mr Odinga to hold talks and agree on the way forward for the sake of the country's dwindling economy.

Ms Swabah Hood, the owner of Baracuda Store in Kwale said her business, like other businesses in the town, have been adversely affected by the ongoing demonstrations in the country.

"Yes we have stock of products to sell but there are no customers to buy our products," she said, expressing fears that the situation may escalate further if political settlement is not arrived at soon.

The transport sector has also been affected by the heightened political temperature.

Kwale Matatu Owners chairman Joseph Wambua said the industry has been hit hard as daily collections remained low.

"There is no circulation of money in the county as we used to see a smooth running of the business before the elections," he said, adding that the transport sector is performing poorly as a result of the political fever.

Additional Reporting by Fadhili Fredrick and Raymond Zaka