Kenyans have been warned to brace for possible mass job cuts as manufacturers continue to grapple with the government’s tight monetary policies.
Hiked taxes and levies have majorly been blamed for the trajectory, a situation that has forced most companies to trim down their wage bill.
According to a representative of manufacturers in Kenya, the country's corporates continue to struggle under the increased burden of taxes and levies.
This he says has forced most employers to contemplate reducing the number of employees in one of the country's most relied-upon sectors.
Kenya's manufacturing sector currently contributes 7.8 per cent to the Gross Domestic Product (GDP), amounting to Ksh3.18 trillion and providing 352,000 direct jobs. This is according to a report by the Kenya Association of Manufacturers (KAM).
A high taxation on the manufacturing sector means a high cost of doing business thus resulting in the stagnation of the sector.
To save the industry, the government often advances various tax incentives, however, despite the various tax incentives being made towards the firms, this does not still solve the puzzle for manufacturers who continually decry strenuous govt policies.
The Federation of Kenya Employers (FKE) on November last year revealed about 70,000 Kenyans lost their jobs between October 2022 and November 2023.
With the announcement, the Federation further noted that most employers were still contemplating reducing their employees to cope with the sudden hike in operational costs.
FKE further attributed the downsizing to a weak shilling which affected manufacturers who rely on imports, however, it is currently the opposite as the shilling has made a comeback to historic gains.
The Federation's President Habil Olaka Jacqueline Mugo, stated that most companies were still reeling from the aftereffects of the COVID-19 pandemic.
In October 2022, barely a month after being sworn in as Kenya's fifth President, William Ruto promised manufacturers a predictable tax regime as part of the govt plans to woo investors into the country.
