Editorials

State must give companies more support in jobs race

jobseekers

Jobseekers in Nairobi. FILE PHOTO | NMG

The optimism by chief executive officers on new job openings is welcome news for workers who have suffered job losses in the past year.

More than 1.72 million workers lost jobs within the first three months of the pandemic coming to Kenya last year, a period when restriction measures to curb the spread of the virus were tighter.

The labour market situation has remained dire in the intervening period, with the second and third waves of the pandemic in the country causing more jobs pain.

Creation of jobs is one of the key indicators of a growing economy, and as such, the expectation that the firms will be hiring more people would signal that the country is coming out of the worst economic run in decades, caused by the pandemic.

The government should, however, heed the calls by the companies for support to ensure they revive and create as many jobs as possible.

In the survey that was carried out by the Central Bank of Kenya (CBK), the CEOs called for fairer regulatory and tax policies to boost business recovery.

In this respect, Kenya can do well to borrow from more developed economies that are pulling out of the Covid-19 related economic difficulties.

On the tax front, the government should expedite processing of tax refunds in order to give firms working capital which can then be deployed into new investments that will create jobs.

The Treasury should also resist the urge to go for low hanging fruit in the imposition of new taxes, such as the minimum tax, which has since been suspended by the courts.

This will not only send a positive signal to the business community, but will also help firms to reduce costs that are often used as an excuse to cut the headcount.

The State should also play its part in increasing the liquidity available in the business sector, mainly by paying the billions of shillings in pending bills that have crippled many companies seeking expansion or systems upgrade.

Timely disbursement of its obligations to its agencies and particularly counties will also improve the flow of cash to businesses, allowing them to recover faster from the Covid downturn that is giving economies sleepless nights.