The recent increase in the cost of diesel is a major concern for the agriculture sector, given that fuel is used on farms when ploughing and moving produce to the market.
More expensive diesel also equates to higher power bills for manufacturers who are among the heaviest consumers of electricity.
Among the agriculture firms, the share of those expecting to reduce their headcount rose to 38 percent from 13 percent in July.
The prospects of a recovery in employment have dimmed, with agriculture and manufacturing firms expecting to shed more jobs this year due to higher fuel and power costs, drought and shipping delays for industrial goods.
The two sectors are the most relied on to generate a high number of jobs due to their long value chains that include input suppliers, producers, transporters and retailers.
Respondents from the two sectors told the Central Bank of Kenya (CBK) in a survey ahead of last week’s monetary policy committee meeting that they will also be cutting jobs to control costs, now that demand has gone down due to reduced purchasing power among Kenyans during the Covid-19 period.
The recent increase in the cost of diesel is a major concern for the agriculture sector, given that fuel is used on farms when ploughing and moving produce to the market.
More expensive diesel also equates to higher power bills for manufacturers—who are among the heaviest consumers of electricity— due to the fuel component charge on bills.
“Agricultural sector respondents reported expected decline in the number of employees in 2021 citing reduced production activity and the need to cut production costs,” said the CBK in the market perceptions survey report published yesterday.
“Players in the manufacturing sector expected reduced numbers due to reduced production activity, interruptions due to shipping delays caused by the pandemic, cash flow challenges, unmet revenue targets and stagnation in business activities.”
Labor force survey
Fifty percent of the polled manufacturing firms said they expect to cut jobs this year, compared to just 11 percent who expected to do so in a similar poll in July.
Among the agriculture firms, the share of those expecting to reduce their headcount rose to 38 percent from 13 percent in July.
The Kenya National Bureau of Statistics’ Quarterly Labor Force Survey for March 2021 shows that jobless Kenyans aged between 15 and 64 who qualify for the labor force numbered 2.49 million, having gone up from 2.29 million in the corresponding month last year when Kenya reported its first case of Covid-19.
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Note: The results are not exact but very close to the actual.
