According to data from the Registrar of Companies, a total of 388 companies dissolved between March and August last year, painting the grim picture of the real situation on the ground as far as business environment is concerned.
That is a worrisome figure by all standards, accounting for an average of 20 companies in a week or at least three companies every day. Statistics for the informal sector, which normally is susceptible and suffers the biggest brunt of harsh economic times is unavailable but your guess in as good as mine; it could be tenfold what is recorded in the formal sector. Never mind that the informal sector carries Kenya’s economy on its back.
The cries on the streets of how bad things are, as evidenced by dwindling purchasing power of the masses, are indicative.
It is exactly half a year since the data by the Registrar of Companies was studied and the situation has not been getting better.
The hardest hit sector is the real estate, which for the longest time possible has been the stronghold of Kenya’s economy, the surest bet ever. The bubble has since burst. What should worry policy makers the more is that the mess in the property sector is only but a warning shot of a crumbling macroeconomics, more so the financial sector, with non-performing loans growing as developers are stuck with concerns that are not going.
Government needs to look into its macroeconomics seriously and rescue the boat when it is still redeemable. They need to look into issues regarding factors of production, infrastructure, regulations, and more so, corruption. They should find out what is edging out the multinationals to our neighbours; Tanzania, Ruanda and Ethiopia? What is killing the local enterprises? What is pushing those that are hanging on into downsizing?
Tragedy is, with switching of attention to another of the President’s pets; Building Bridges Initiative, the political class, and therefore the policy makers have already shifted focus to the 2022 General Election, three years away. With that, sobriety has been thrown out the window. The economy is on autopilot and while God may be for us all, it could be every Kenyan for his or herself on matters business and survival. Sad.
