EDITORIAL: Ensure economy operates smoothly during Pope visit

This month’s three-day visit by Pope Francis is a welcome confidence vote for Kenya, but it should however not be allowed to interfere with the general functioning of the economy.

According to State House spokesperson Manoah Esipisu,  the government is discussing a number of options including a two-day public holiday or asking employers for flexible working hours on the affected days. 

A two-day public holiday means business will completely grind to a halt on November 26th and 27th (Thursday and Friday) hitting the economy hard given that Nairobi generates more than half of Kenya’s output. This means lost revenues running into billions of shillings, culminating into missed tax opportunities by Kenya Revenue Authority (KRA).

The Treasury is struggling due to low revenues after KRA failed to meet its tax targets forcing the government to embark on heavy domestic borrowing, pushing up borrowing costs and crowding out small businesses.

Normal services and projects have stalled in various counties due to lack of funds occasioned by poor revenue collection.

A two-day holiday means that the securities market will be shut leading to lost revenues and commissions by investors and brokers. It will also postpone international capital inflows as banks will be shut.

Small businesses

Normal businesses such as commuter transport, merchandise sales among others will lose out as many will opt to stay at home.

For small businesses which depend on daily output to pay wages, their labour costs will go up while workers who are paid on a daily basis will not be paid for the two days.

Heavy security presence will entail closure of key roads in the city and given our poorly developed infrastructure, there will be no alternative roots forcing people to postpone planned business engagements.

The government should consider either allocating a maximum of one-day holiday or asking employers for flexibility in working hours.

READ: State mulls holiday over papal visit lockdown

The government should also consider the case of the US President’s visit in July where there was no public holiday while ensuring that security precautions to do not overrun normal operations.

Kenya’s economy is struggling to rise from the ashes of terrorism that has sunk tourist numbers leaving many unemployed and scaring away prospective foreign investors.

The World Bank has revised Kenya’s growth outlook for 2015 downwards to 5.4 per cent which is lower than a previous estimate of six per cent, this means that more should be done to help businesses recover instead reducing labour productivity.

SOURCE: BUSINESS DAILY