The economy took a hit yesterday as hundreds of businesses shut down, mainly in the capital Nairobi and Kisumu, following demonstrations called by Azimio la Umoja One Kenya Coalition leader Raila Odinga.
Both large and small businesses counted losses as the demonstrations stopped operations. But the Nairobi Securities Exchange (NSE) painted a different picture after investor wealth rose by Sh56 billion yesterday compared to Friday, buoyed by gains on the Safaricom share price.
Data from the NSE showed market capitalisation stood at Sh1.66 trillion at close of trading on Monday, having gained from Friday’s Sh1.61trillion.The shares traded, however, dropped from 83.7 million on Friday to 22.8 million yesterday—a 72.6 per cent drop that indicated investors’ lethargy in the wake of protests whose impact on the economy is heavy.
In Nairobi, which was the epicentre of the protests, businesses remained shut throughout the day, with few that had opened in the morning closing later as it became apparent that they risked huge losses due to looting.
Deputy President Rigathi Gachagua claimed businesses lost an estimated Sh2 billion due to the protests.
Many of the businesses that were affected were shops retailing different products, eateries, supermarkets and service businesses, both within the CBD and in the outskirts.
Loss of manpower
“Shops have been closed due to the unrest resulting in lost incomes, which has a larger impact on the general economy. It has also led to a loss of manpower in terms of people who can’t reach their offices out of fear or out of transport challenges,” said Retail Traders Association of Kenya Chief Executive Officer Wambui Mbarire.
The protests, coupled with global uncertainty caused by troubled Credit Suisse Bank, also hit the Kenyan shilling, which has been on a steep devaluation trend in recent weeks. The shilling slumped to another record low to exchange at 130.0088 units against the US dollar yesterday, marking a 0.097 per cent slump from where it was on Friday, according to the Central Bank of Kenya.
The shilling has lost 5.3 per cent of its value against the dollar since the start of this year.
The protests hit transport businesses in many parts of the city. With roads in different parts of the city blocked by both police and protesters, transport was largely paralysed as many public transport vehicles were packed, a key pointer to the challenges many businesses faced as they could not transport goods, or move people. In Nairobi, roads were clear of the usual traffic jam, while in other towns that witnessed protests, vehicles were also kept away.
Air transport was also affected as Kenya Airways shut its Kisumu town booking office.
“KQ wishes to inform our customers that our town booking offices in Johannesburg, South Africa, and Kisumu, Kenya will remain closed on Monday, March 20, 2023 and reopen on March 21 due to the anticipated protests in these cities,” the airline said in a Sunday evening statement.
The Nairobi and Kisumu county governments will also feel the heat of the demonstrations, as one of their biggest revenue streams—parking fees—took a hit as motorists parked their vehicles at home. Nairobi collects an average of Sh5.3 million daily as parking fees, which forms 30 per cent of its annual own-source revenue, according to the Controller of Budget’s latest report (July-December 2022.
And with the streets of Nairobi rendered risky amid fears of unruly protesters who take advantage to loot, none of the thousands of hawkers who dot city streets dared operate.
“It’s unfortunate because hawkers rely on daily earnings and so today very many will not put food on the table. The demonstrations are not really helping small traders; they are actually messing with them because they cannot do their business. There is a need for dialogue, this country’s economy is not doing well,” said Kenya National Hawkers Association National Chairman John Kihiu.
The association estimates that Nairobi’s CBD has about 25,000 hawkers, although City Hall last year indicated the number is about 3,000.