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Market News

Low money circulation hurts River Road small-scale businesses

Shoppers at a school uniform
Shoppers at a school uniform store on River Road, Nairobi, in January 2009. FILE PHOTO | NMG 

Business premises in Nairobi’s River Road district are having an uphill task attracting tenants thanks to withholding of government payments to suppliers and poor cash flow.

While in the past it was difficult getting business premises to rent in this part of the CBD, notices of available space have become common as many traders close shop and others merge to cut cost.

Kenya National Chamber of Commerce and Industry researcher Kiragu Chege said the central and county governments delay payments to suppliers, affecting businesses.

“As a result, small-scale traders who supplied the government departments and suffered delayed payments have found it hard to restock hence closing shop. This has eased demand on business premises causing rental rates to fall,” he said.

Stakeholders also warn that some of the government policies in the city are killing small and medium-sized enterprises.

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Nyamakima, Luthuli Avenue, Kirinyaga Road and parts of Haile Selassie Avenue have seen the competition for trading space go down.

“Unlike the situation that has prevailed for the past 20 years in these areas where getting a rental space to trade in was hard and rental rates being high, today there are so many spaces on offer.

“In 2018 a square metre of space was on offer for between Sh10,000 and Sh50,000 a month. Today, the same spaces go for between Sh7,000 and Sh38,000,” said James Kanene, chairperson of Generations Real Estate, based in River Road.

He said the decline is partly due to the crackdown on counterfeits as well as poor economic policies.

“There is too much uncertainty in importing goods for trade.

“The government is also creating poverty among its people by reckless demolition of trading structures within the capital city.

“All these activities might be explained as restructuring the city and beautifying it but there are grave impoverishing consequences being felt,” said Mr Kanene.

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