With Nairobi ranked the sixth riskiest city in Africa, the country’s business community is feeling the pinch as the outbreak continues spreading outside China.
Kenyans have been travelling to Guangzhou, China’s wealthy manufacturing province, for supplies while their dealers have also been frequent on the route to Nairobi.
But with the cancellation of flights from China’s second most affected city, Kenyans have a short window before they run out of stock.
Impact on Business
The coronavirus outbreak has slowed down trade between Kenya and China with sellers depending on goods from the Asian nation significantly affected.
With traders in Nairobi now starting to source for goods in Uganda, the commodity prices could go up by 300%.
In Africa, Nairobi was ranked the sixth riskiest city by the University of Southampton’s WorldPop team. For Kenyan traders who rely on goods from Guangzhou, ranked 15th among the highest risk Chinese cities, the lack of stock could take a toll on Kenyan businesses.
Stocks are expected to last for only 60 days and with turning to Uganda for supplies, Kenyan consumers will bear the brunt of hiked prices.
Last year, Kenya imported goods worth Sh 390 billion from China and with the slowdown in manufacturing, this supply chain will be heavily affected.
Kenya imports cosmetics, low-cost manufactured goods and electronics- including TVs, mobile phones and computers among others- from China.
With the likelihood of a negative balance in Kenya, the Kenya Private Sector Alliance (KEPSA), is engaging all its members to begin to calculate the projected economic impact of the coronavirus in each sector.
Rapid response mitigation plan
The collated input will inform the development of a rapid response mitigation plan to minimize the impact of the outbreak on the Kenyan market. It will also allow the private sector to measure the impact of the expected global slowdown of trade on Kenya.
KEPSA is encouraged by Executive Order No 2 of 2020 issued by President Uhuru Kenyatta, which provides a platform to address the national emergency efforts on the outbreak.
The body which has 276 members will present collated members’ proposals during the quarterly engagement with the National Development Implementation and Communication Cabinet Committee (NDICC) Roundtable.
The roundtable is chaired by Cabinet Secretary Dr Fred Matiang’i and it will be held in early March. KEPSA seeks to work with the government on economic mitigation actions during this season that will affect both big and small business and feed to the new established task force by the government on our area of economic impact.
“Also, some of our private sector players with a critical reliance on imports from some of the affected regions are activating other supply chains and sourcing options to mitigate imminent disruptions before global trade settles back to normality,” noted a statement from KEPSA.
In regards to the health concerns, the KEPSA health sector board and the Kenya Healthcare Federation (KHF) are working closely with the Ministry of Health on joint activities to ensure coordinated and regular communication updates to the public.