There is something that happens to someone’s voice when their business is suddenly collapsing that’s frightening to hear.
For, oh how many of us running businesses hoped that this political journey of ever escalating brinkmanship would, somehow, eventually, in some way, come to some satisfactory close that everyone could live with.
The sickening realisation is that it wasn’t, and was actually going to drain the life out of many a business owners’ face this last week.
As an owner manager of a company with 23 staff, I get to know the CEOs and owners of the many companies we now serve. We talk, about business, in a way that isn’t guarded or secretive. On Tuesday, evening I took a call from one of them. He had been due to pay us a Sh1.2 million invoice that day, but hadn’t.
An investor funded project, his account had instead been frozen by his foreign partners. It would only be for a short time, until this election was over, he told me. They just weren’t willing to continue until this political crisis was sorted.
He hadn’t seen it coming, he said. He hadn’t even paid his staff. But we just needed to get through this election.
Thursday afternoon, I got a call from another client, an investment-backed foreign owner. He was broken. He now couldn’t and wouldn’t be able to complete the funding round he’d already waited four months to conclude after it overran earlier this year.
“I just can’t run another three months, and where does this go now? What can even be the outcome of this election? Investors just literally aren’t going to back anything now. Their wallets will stay closed,” he told me.
Two clients down, my own numbers were suddenly beginning to look pretty grim too. Of Sh2.4 million still due in revenues by end-October, Sh1.5 million had disappeared in just two phone calls. And holes were opening up in November as well.
I rang back the first client, who had several projects with us, and discussed the turns things had taken, ever since Tuesday. His take, his investors wouldn’t abandon the journey completely, but, truthfully, this was likely to be a closure for now, probably until end-January, or whenever the politics were finally sorted. He was going to have to lay off all of his 27 staff.
The other client was going to be pulling jobs too, lots of them.
I got my books out, began looking up contract terms, checking which of my other clients were most vulnerable. Which payments would still be definite? Which partners could I get faster payments from?
I called the next two most vulnerable clients, and finally some hope: they were still in place. I called another partner, discussed ways of getting a large project paid at the end of each month, instead of completion plus 30 days.
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I began to breathe again. And then I read a CNBC report saying Kenya would be able to keep covering its national debt, despite the political crisis. And it made me wonder just what people think businesses collapsing actually means.
Just those two partners of mine will now drop 40 staff, in a crunch that is being replicated across business after business this week, following literally months of projects delayed, deals stalled, investments held up.
And where does the government’s money come from to pay its debt, in the cacophony of business stumbles and closures now underway?
Well, me, I think still half or more of it comes from taxes. Those 40 staff, almost 30 per cent of their salaries were going to the National Treasury. So was the value added tax on all our invoices to them, and all their other suppliers’ invoices too.
I have just seen millions of shillings wiped off my sales figures between now and Christmas. But for every shilling, the pain is 60 per cent mine and 40 per cent the government’s.
So just in case you were expecting the figures to look strong from here: just try talking to a business owner. We’re now into meltdown. Which I guess beats our politicians agreeing on what can count as a transparent electoral tallying system.