All is not well in Kenya as over 200,000 civil servants as well as employees in private sector are expected to be laid off.
It is reported that several banks will undergo restructuring in the coming year I order to streamline their operations and increase profitability. Sources within the banking sector inform that more than 70 % of the local banks will report either losses or decreased profits.
Over the past 10 years several banks have been posting huge profits. This was made possible by the fact that most Kenyans went for loans to facilitate their projects. Interest from loans earned banks significant amount of profits.
However, interest rates adjustments by the central bank have seen local banks increase interest rates by worrying margins, which is likely to scare away borrowers.
This month alone, most banks have reported over 50 percent decline in the number of borrowers: the trend is expected to continue until the economy improves.
In the year 2015, several government firms are reportedly experiencing difficulties, example is Uchumi Supermarkets which has closed its branches in Tanzania and Uganda, and it’s also expected to close several branches in Kenya. Kenya Airways is also facing financial difficulties; it posted a loss of over Ksh 27 billion in 2015.
The government has declared that it’s facing financial difficulties where even paying civil servants is an uphill task.Already,Kenya Revenue Authority has missed its target by over Ksh10 billion and they have warned that the future is not bright. News from the taxman indicates that they are undergoing restructuring which will affect several employees within the institution.
The International Monetary Fund warned Kenya that if Uhuru Government will not retrench 40,000 employees, the country will be another Greece. We have heard that the government is preparing to lay off over 50,000 employees in the year 2017.
Things are terribly bad in all sectors of economy and if the situation is not arrested, which is hard because of corruption in the government and overspending, over 200,000 employees will lose their jobs in the coming year.
This will add more miseries to many Kenyans who are still jobless despite having good academic papers.