Company jobs record slowest growth in July

Kenya’s private-sector jobs in July expanded at the weakest pace since April when tighter Covid-19 restrictions were in force, hurt by higher taxation and fuel prices that slowed down growth in sales.

Stanbic Bank Kenya’s Purchasing Managers Index (PMI) — based on feedback from corporate managers in key economic sectors such as services, manufacturing and agriculture — suggests the onset of new taxation measures in July pushed cost pressures to a 16-month high.

The firms, which were already battling elevated fuel expenses, largely passed on the additional costs to consumers, raising prices of goods and services that softened growth in demand.

“With sales growth slowing, the rate of job creation among Kenyan firms eased to the softest in three months,” analysts at Stanbic Bank and UK researcher, IHS Markit, wrote in the PMI report for July.

“Cost pressures accelerated sharply at the start of the third quarter, as businesses found that tax changes led to a marked increase in the price of imported goods. Amid efforts to maintain profit margins, output charges were also raised to a greater extent, albeit not as quickly as input costs.”

The headline PMI reading for July — which measures month-on-month changes in private sector activity such as output, new orders and employment — slowed for the second month in a row to 50.6 from 51.0 a month earlier and 52.5 in May.

PMI readings above 50 denote growth in business conditions over the previous month, while those below point to a contraction.

“Domestic demand improved by the second slowest pace since the lifting of public health restrictions after the first wave of pandemic (July 2020), with some firms reporting a drop in customer numbers,” Mr Kuria Kamau, a fixed income and currency strategist at Stanbic Bank, wrote in the PMI report.

“Firms in agriculture, construction and services witnessed an increase in demand and output, while those in manufacturing and trade saw declines.”

The Finance Act 2021 imposed a 20 percent excise duty on fees and commissions lenders earn, raising the cost of credit, while the supply of cooking gas and clean cook stoves have been slapped with a 16 percent value-added tax. Others are a 10 percent excise duty on articles of plastics, a super absorbent polymer used to make diapers and imported resins.

“Manufacturers were totally uninformed and unprepared to start implementing the excise regime and, in many cases, the enforcement of the provisions remains unclear,” Mr Mucai Kunyiha, the chairperson of the Kenya Association of Manufacturers (KAM), said in a statement on July 30.

“Adding to this conundrum for businesses, the Kenya Revenue Authority i-tax system was also not prepared for some of these changes and manufacturers cannot, for example, register to collect excise on plastic bottles, forestalling production and sales and severely diminishing efforts to steer the country from the pandemic effects.”

• The Lancet Commission on Global Surgery estimates that 98 percent of people residing in emerging countries, including Kenya, lack access to multi-specialty surgical services.
• The commission further describes this access to the services as including timeliness, safety, affordability for patients and an adequate capacity by providers.
• This gap forms a good starting point for pursuing the implementation of a multi-specialty growth strategy by clinics and hospitals.

It is an inherent ambition for most healthcare facilities to, over time, increase their scope of services in order to serve a wider catchment population whilst providing a broader array of clinical services.

However, the conundrum that most healthcare managers grapple with is on how, where and what specific activities to pursue in order to actualize this desire in a cost effective and, ultimately, productive manner.

The Lancet Commission on Global Surgery estimates that 98 percent of people residing in emerging countries, including Kenya, lack access to multi-specialty surgical services.

The commission further describes this access to the services as including timeliness, safety, affordability for patients and an adequate capacity by providers. This gap forms a good starting point for pursuing the implementation of a multi-specialty growth strategy by clinics and hospitals.

It is important for healthcare managers to digest available datasets in order to elucidate the characteristics of the disease burden surrounding their health facilities. Such datasets are available both internally and externally.

Internally, records of disease profiles attended to in the facility will be of use; especially of cases that eventually required referral to another center due to non-existence of the needed clinical services.

Externally, the Kenya Health Information System is a freely available online database that contains information on disease burden by type and location in the country. Also, there are specialty-wise medical journal publications that bear extensive information on various disease burdens.

As an example, one may establish that a general outpatient clinic in a hospital setting saw many patients with backaches and of these, the MRIs done showed that most of the patients had spinal compressions but were not definitively attended to due to the unavailability of a neurosurgeon or an orthopedic surgeon specializing on the spine.

The next step would be to consider setting up a spine clinic running on specific days wherein patients presenting with such back problems can be booked into. At this stage, a consideration may be made to invite a visiting specialist doctor to run the clinic on those specified days.

It is worthwhile that during this introductory phase, patients are informed on the need to subscribe to a health insurance scheme so as to limit their need for out-of-pocket expenditure and increase the affordability of such highly-specialized care.

As these occur, the healthcare manager should be forecasting on the supportive services that are required along this specialty line and making plans for the accompanying capital and operational expenditure.

If these cases require surgical interventions, this planning should be around ancillary requirements such as the availability of surgical instruments and implants, staffing cadre, rehabilitative services such as physiotherapy and so on. It helps a great deal to involve input from a specialist in the particular field.

Whereas this example covers a surgical specialty, the same data - driven approach can be applied in all other facets of medical specialties to ensure that an iterative and productive growth approach is undertaken.

The writer is a healthcare leader and geospatial epidemiologist

• The High Court has dismissed a suit filed by minority owner of Bluebird Aviation who accused his partners of siphoning more than $1 billion (Sh108 billion) from the airline through tax evasion, fraud and money laundering.
• Justice Alfred Mabeya brought to an end the five-year court battle pitting Adan Abdi Yussuf against three other owners of the 29-year-old airline.
• The judgment came after the Director of Criminal Investigations (DCI) cleared three shareholders and executives of Bluebird — Hussein Farah, Unshur Mohamed and Mohamed Abdikadir — from financial malpractices after a nine-month investigation.

The High Court has dismissed a suit filed by minority owner of Bluebird Aviation who accused his partners of siphoning more than $1 billion (Sh108 billion) from the airline through tax evasion, fraud and money laundering.

Justice Alfred Mabeya brought to an end the five-year court battle pitting Adan Abdi Yussuf against three other owners of the 29-year-old airline.

The judgment came after the Director of Criminal Investigations (DCI) cleared three shareholders and executives of Bluebird — Hussein Farah, Unshur Mohamed and Mohamed Abdikadir — from financial malpractices after a nine-month investigation.

The investigation followed a criminal complaint from Mr Yussuf against his fellow shareholders, accusing them of fraudulently channelling massive funds out of the company as part of a money laundering scheme.

Justice Mabeya dismissed Mr Yusuf’s allegations, saying he failed to prove claims of fraudulent accounting, tax evasion, fraud and money laundering.

“In the present case, all that the plaintiff did was to make sweeping allegations without any backing by way of evidence. He only stated that he had carried out investigations and made discovery of the allegations he made,” said the judge.

“The documents that were produced were not authenticated to prove any of the allegations made against the defendants.”

Mr Yussuf, who claims to own 25 percent of the charter airline, argued that more $1 billion (about Sh108 billion) has been stolen and put in offshore accounts and investments in Western capitals after being transported physically out of the country without declaration. He said the three directors were using the airport passes granted for restricted areas in airports to move the billions.

The DCI dismissed the secret movement of cash at the airports, arguing its investigation and probe by Kenya Airports Authority (KAA) found no evidence of money laundering.

The Financial Reporting Centre through the DCI said it failed to detect breaches while tracking the flow of cash in and outside Blue Bird Aviation.

Mr Yussuf claimed that his partners were stashing proceeds from the airline in international banks under Amazon International FZE. But Justice Mabeya said his partners had sufficiently showed that their relationship with Amazon was purely commercial.

“That the plaintiff had failed to demonstrate the directorship or shareholding of the defendants at Amazon or that they had stolen money from the Company and deposited the same at Amazon’s accounts,” he said.

“No faithful director exercising independent judgment would take any of the said measures, none of which are beneficial to the Company. In fact, all the steps taken by the plaintiff were contrary to the success of the Company. They were meant to sound a death knell on the company,” he added.