Private sector goes beyond call of duty during the Covid-19 pandemic

KEPSA CEO Carole Karuga with KEPSA Head of Policy Research & Analysis and Public-Private Dialogue Victor Ogalo briefing the press during the launch of Impact of Coronavirus report on March 10, 2020.

1. Introduction

Kenya Private Sector Alliance (KEPSA) is a limited liability membership organisation registered in 2003 as the apex body of private sector in Kenya. KEPSA brings together the entire business community from all sectors of the economy under one umbrella, to engage and influence public policy in a single voice to ensure year on year improvement in the overall business environment.

With current over 500,000 direct and indirect members organised through Business Associations, corporates, multinationals, SMEs and start-ups, KEPSA is a key player in championing the interests of the Kenyan business community in trade, investment and industrial relations.

2. Public Private Partnership (PPD) during the COVID-19 pandemic

Before the first case of Covid-19 was reported in Kenya in March 2020, businesses had begun suffering supply chain disruptions due to linkages with major global markets in Europe, China, and other Asian countries that had imposed travel restrictions to contain spread of the virus. KEPSA swung into action and initiated a survey to determine the impact of the pandemic. The survey inspired the constitution of a Covid-19 Business Response Team, comprising key sector leaders, to craft an economic management framework.

The framework’s overriding focus was to protect small and medium-sized enterprises (SMEs), to safeguard livelihoods, prioritising health and safety of employees, communities, and healthcare workers, while ensuring supply chain continuity. The framework also sought to mobilise private sector resources, maintain high ethical standards and avoid moral hazards such as price spikes, and production or distribution of low-quality products. It also involved frequent dissemination of clear and accurate information, and promoting social stability.

Following robust engagement with the Government, we presented to President Uhuru Kenyatta, the Covid-19 strategic recommendations matrix on March 20, 2020 during the 11th Presidential Roundtable.

In his address to the nation on March 25, 2020, the President announced economic stimulus measures that included tax cuts (reduction of PAYE and 100 per cent relief for incomes below Ksh24,000, as well as reduction of VAT, corporate tax and turnover tax for SMEs); expedited settlement of pending bills and VAT refunds; lowered Central Bank Rate and Cash Reserve Ratio to inject more liquidity into the economy; and temporarily suspended listing of loan defaulters with Credit Reference Bureaus. An additional Ksh56.6 billion Economic Stimulus Package was announced to support most affected sectors, including establishing an SME Credit Guarantee Scheme.

KEPSA conducted two more surveys in April and May/ June 2020 to assess the impact of Covid-19 and track effectiveness of the Government stimulus measures. Sixty-one per cent of the respondents indicated benefiting from reduced PAYE, 48 per cent from reduced VAT and 45 per cent from reduced corporate tax. Reduction of turnover tax benefited 21 per cent of businesses, while 12 per cent had accessed cheaper loans.

Of the stimulus measures, pending bills and VAT refunds remained a challenge, with only six per cent and 11 per cent of businesses benefiting respectively.

Protocols for re-opening the economy: Following consultative meetings with the Government through the National Development Implementation and Communication Cabinet Committee, KEPSA mobilised its 16 sector boards to develop re-opening protocols. Some of these were incorporated in Guidelines for Business Operations during Covid-19, published on June 2, 2020 by the Ministry of Industrialisation, Trade and Enterprise Development.

With the lifting of travel restrictions on July 6, 2020, business activity has since increased. The Stanbic Bank Kenya Purchasing Managers’ Index that tracks private sector activity stood at 54.2 points in July, the first positive score (above 50) in the year, from lows of 34.8 in April. This was sustained in August at 53.0 points, with increased output and new orders from export markets, although general business sentiment and employment remains subdued. KEPSA is undertaking a fourth survey to assess progress of recovery and opportunities from the pandemic.

3. KEPSA projects to mitigate Covid-19 response

a) Flowers of Hope initiative: In collaboration with Kenya Healthcare Federation, Kenya Flower Council (KFC), Kenya Association of Manufacturers (KAM), Elgon Kenya, Kenya Airways and Jambo Jet, Rotary Kenya and Women of Kenya Initiative, KEPSA launched the “Flowers of Hope” project aimed at distributing flowers to local hospitals and existing markets in Europe, with a message of hope and compassion, and to sustain jobs in the floriculture industry.

Flowers and face masks worth over Ksh3 million were distributed to 10 hospitals in Kenya, and another 200 bouquets of flowers to the UK National Health Service frontline health workers. The aviation industry converted passenger planes to transport fresh produce and flowers to Europe.

b) Wheels of Life initiative: This is an innovation by Dr Jemimah Kariuki supported by the University of Nairobi, Ministry of Health, KEPSA, Bolt, KHF, Amref Health Africa, Telesky and Rescue.co. The initiative uses the KEPSA 1196 hotline to enable mothers access hospitals during curfew hours. The initiative

continues to serve a growing number of women (with 2,413 cases handled so far), and we have been working with counties to expand it. Five counties are now on board, i.e., Uasin Gishu, Kiambu, Machakos, Nyeri, and Nakuru.

c) KEPSA women in partnership with ChandariaFoundation distributed food, clothing and sanitizers to the urban poor families in Nairobi. They also distributed a tricycle to a disabled person in Narok County, and are undertaking an initiative towards establishing income generating activities for women in prisons.

d) Financing: KEPSA partnered with Mastercard Foundation, setting up a fund to support 400 MSMEs with up to Ksh1 million in interest-free loans, repayable within six months.

e) Digital Commerce Programme: KEPSA partnered with TradeMark East Africa (TMEA) for the e-Commerce Booster Programme. About 2,000 SMEs were trained on e-commerce and digital marketing, and on-boarded onto digital marketplaces. In partnership with Jumia, KEPSA is also training business owners on online marketing tools while supporting them to digitise, register and open shops at zero initial cost. This is meant to help them grow their sales and save jobs.

f) Capacity Development: In partnership with Educate Global Rapid Technical Assistance Response Team, KEPSA is supporting businesses in food, health and education sectors through financial restructuring, strategy review and addressing critical operational issues. In partnership with Passion Profit Limited, KEPSA is also training and mentoring women and youth in business. This complements a similar programme targeting women in business, in partnership with the Embassy of Ireland.

g) “Men in Silence”: Launched by KEPSA in partnership with DanShieShie Foundation, TeleSky and Kenya Healthcare Foundation for responding to male mental and gender based violence issues through KEPSA hotline 1196. A total of 1,509 consultations have been received thus far.

h) Reporting of non-compliance to Government directives through the 1196 Call Centre in partnership with National Police Service, Citizen TV and TeleSky. A total of 3,172 reports have been received so far and directed to NPS.

i) Tele-medical services: A total of 40 tele-health providers were registered, enabling continuous access to healthcare services with reduced movement. Mobile platforms have also been developed to enable patients access medical services while limiting person-to-person contact. The private sector is involved in development of Digital Healthcare Regulations.

j) Training and mentoring youth in emerging digital opportunities: KEPSA began implementing the second phase of Ajira Digital Programme in January 2020. This is in partnership with the Ministry of ICT, Innovation and Youth Affairs and e-Mobilis, funded by Mastercard Foundation. In the first phase that began in 2017, 7,168 youth were trained (including 1,984 females).

k) Information support: KEPSA established an online portal, http://COVID-19.ke, and a 24-hour call centre, #1196. The call centre was linked to the Ministry of Healthhotline #719.

l) Issuing of ‘essential services’stickers: KEPSA supported its members during the inter-county movement restrictions to ensure supply chain continuity.

m) Women and youth development: We are currently conducting training to women and youth on the development of business plans adopting the waste to value concept. This is financed through the French Embassy. We aim to train 100 women and youth as well as provide seed capital to 10 entrepreneurs.

4. Examples of private sector contributions

In response to the Government’s call, KEPSA mobilised its members to contribute resources towards Covid-19 mitigation. Some of the contributions include the following:

a) Food: KEPSA Women, Chandarana, Naivas, Bidco, Tusky’s, Safaricom, Chandaria Foundation, Team Pankaj, Serena, Sarova Stanley, Visa Oshwal community, etc.

b) PPEs: EABL, KPC, Bidco, Oil industry players, Shell, manufacturers, Jumia, BOC Gases, Equity Group Foundation etc.

c) Water, soap and tanks, PPEs, masks, sanitisers, hygiene and personal care products: EABL, KPC, Bidco, fuel companies (e.g. Shell), Manufacturers, Jumia, BOC Gases, Equity Group Foundation, Kenya Flower Council, Stanbic Bank, Rotary Club and Elgon Kenya, KWAL, Kurrent Technologies etc.

d) Cash and in kind donations to COVID-19 Fund: Devki Group, Safaricom

KPLC, First Chartered Securities, Citi Bank Kenya, UBA Bank, Co-operative Bank,

Naivas Supermarket, WPP Scangroup, Eco Bank, UAP Old Mutual, Media Owners Association of Kenya, Hindu Council of Kenya, Capwel Industries, KCB, NCBA,

ABSA Bank, BAT Kenya PLC, Sanlam Investments East Africa Ltd, Chandaria Foundation, Kenya Civil Aviation, Equity Group Foundation, Mastercard Foundation, Oxygène MCL, Kurrent Technologies, BOC Gases etc.

e) Financing: Kenya Bankers Association (KBA) – Commercial banks restructured over Ksh844 billion worth of loans by June 2020. They also contributed to the Covid-19 fund.

f) Digital support: Wananchi, Safaricom, Airtel Kenya, Google, Telkom, Jumia, Media Owners Association of Kenya, Live Ad, PZ Cussons, Unilever, Brands & Beyond Limited, Reckitt Benckiser, Protel Studios etc.

g) Distribution logistics and transport: SafeHands Group (Jumia, Uber, Glovo, Sendy and others), Coca Cola, EABL, Bolt, Mobius, KEPSA, KHF, Telesky digital country, etc

h) Thermal gun thermometers, umbrellas, ventilators: KEPSA, IBM, Toyota Kenya, KAM automotive sector etc.

i) Education: IBM, Elimu Holdings, Longhorn, Cytonn etc.

j) Matresses and other contributions: Slumberland, Chandaria, Coca-Cola, Internet Society Kenya Chapter.

k) Support in addressing other pertinent issues: KEPSA members, ASNET and Bayer Ltd donated 170,000 litres of Deltamethrin pesticide worth Ksh100 million to Kenyan and Ugandan Governments to aid the fight against desert locust invasion.

5. Safeguarding business during Covid

i) Livelihoods: From KEPSA survey in May-June, 41 per cent of businesses retained all employees, and two per cent hired more. Another 53 per cent opted for unpaid leave while 60 per cent reduced salaries to cut costs and safeguard jobs. We saw many innovate to keep staff, such as in tourism and horticulture. For example, Elgon Kenya Ltd retained its 600 workers and provided them with food rations.

ii) Training Health Care Workers: Over 3,000 healthcare workers and more than 30 hotel staff have been trained in handling and managing Covid-19 cases. An additional 2,000 healthcare workers were also mobilised for Covid-19 response.

iii) Reengineering business: KICOTEC and Bedi Investments reconfigured factories to produce PPEs. EABL partnered with KPC and the National Youth Service to produce 135,000 litres of sanitiser for distribution to the vulnerable and at-risk groups.

iv) Innovation: Kenya Bureau of Standards (KEBS) certified Kenya’s first locally manufactured ventilator dubbed Pumuashi 3.0 by Mutsimoto Limited through the Kenya Association of Manufacturers’ (KAM) Automotive Sector. SMEs also unveiled innovations. Following are some examples:

• A fundi in Nairobi produced a table bench, retailing at Ksh22,000 and has

received over 700 orders;

• Two innovators in Kiambu County have produced hospital beds, each costing

Ksh65,000, for government using locally available materials;

• A local MSME in Kibera named ‘Kitu Kali’ is producing shoes from locally available materials.

• A Kenyan start-up launched Gumzo, a platform that aims to compete with Zoom, among others.

• Other innovations include cinemas starting drive-in shows, increased demand for bicycles as more people turned to cycling for exercise.

6. Emerging bigger and better

Covid-19 will greatly shape the future of business. Technology will continue to be deployed in trade and business processes, to comply with increased regulations, such as social distancing that will affect the way we travel and do business. With IMF projecting recovery in 2021 and hopes of a Covid-19 vaccine/cure, businesses have to improvise and tweak their models to survive the new normal.

KEPSA commits to continue working with the Government, development partners and other stakeholders to turn the tide, mitigate negative impacts and make the most of opportunities that the pandemic presents.

KEPSA has 147 Associations and 400 corporates giving us reach to over 500,000 businesses.

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