Casual workers access to jobs shrinks by 40pc

Tuesday, May 26th, 2020 00:00 |
SGR workers on site. Photo/File

Lewis Njoka @LewisNjoka

Casual labourers continue to bear the brunt of the Covid-19 pandemic, with reports revealing that more were laid off than their permanent counterparts.

Kenya Association of Manufacturers (KAM) estimates in a recent report that 40 per cent of local manufacturers laid off casual employees compared to 17 per cent permanent workers.

Since the first coronavirus case was reported in Kenya in March, the government has instituted several measures to curb the pandemic. Unfortunately, most of the precautions reduced work opportunities for casual labourers amid cessation of movement and a curfew.

Worsening situation

“At the moment, many employers are holding on to their employees. If the support does not come forward, that figure will increase,” said Suresh Patel, vice chair, KAM’s chemical and allied sector.

These sentiments are shared by other analysts who say SMEs, which are among the largest employers for casual workers, were hardest hit by the Covid-19 pandemic.

On average, workers across all industries reported having worked fewer hours in the period as compared with the usual hours worked per week, notes the Survey on Socio Economic Impact of COVID-19 on Households Report.

The report by Kenya National Bureau of Statistics shows that almost half of respondents who were absent from work reported that it was due to lockout or stay away instructions as guided by employers.

“Other reasons include temporary sack, and temporary layoff or work reduction,” said the report by the statistics body in part.

Because of weak financial muscle, which limits SMEs’ ability to employ permanent staff, they mainly rely on casual labourers for business continuity.

Production capacity

The KAM report warns that 42 per cent of manufacturers are operating at below half their production capacity with micro, small and medium enterprises (MSMEs) utilising only 37 per cent of their production capacity, hence, the need to lay off workers if the economy does not turn around.

“From about 10 cars a day, we are now repairing only two cars a week. Most of our clients are personal car owners who work in Gigiri and Runda. 

“Due to Coronavirus outbreak, most of them have closed their offices and are now working from home,” says Michael Wachuhi, a mechanic at Gigiri, Nairobi adding that they have since asked most of the casual labourers to report to work in shifts.

Worse still, 86 per cent of MSMEs are experiencing cash flow constraints, as compared to 79 per cent in companies, leading to difficulties in meeting their financial obligations such as salaries and operational costs.

“SMEs are currently facing more challenges in access to finance, greater cash flow constraints and a bigger drop in demand and turnover,” the KAM report says.

To resolve cash flow challenges, many have negotiated payment plans with their suppliers, customers and banks and sought additional financial support from other individuals and institutions.

Speaking on Saturday  when he unveiled an eight-point Sh54 billion economic recovery plan, President Uhuru Kenyatta hinted the curfew and the lockdown cannot continue forever.

He said he might soon relax the curfew and cessation of movement in several counties, it is hoped this will open up the economy and spur demand for goods and services to help SMEs post Covid-19.

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