Ndii was responding to remarks by Safina Party Deputy Party Leader and counsel Willis Otieno accusing President William Ruto and his administration of gauging the state of Kenya’s economy and the economic status of Kenyans on the availability of basic commodities like unga.
David Ndii, Chairperson of President William Ruto’s Council of Economic Advisors (CEA), on Wednesday, November 13 responded to an announcement by G4S, one of the leading global integrated security companies, that it would lay off up to 400 employees in a period of six months.
Ndii was responding to remarks by Safina Party Deputy Party Leader and counsel Willis Otieno accusing President William Ruto and his administration of gauging the state of Kenya’s economy and the economic status of Kenyans on the availability of basic commodities like unga.
“According to Ruto and his bloggers, the true measure of a nation’s economic health is not reflected in corporate staffing decisions but in the prices of basic commodities like unga. For Ruto, the affordability and availability of unga serve as a more accurate gauge of economic well-being, directly impacting the daily lives of citizens,” wrote Otieno on X.
Ndii however revealed that the move was a normal situation that takes place in most economies, even though G4S’s move of mass layoffs were done in response to extraordinary circumstances.
A photo of security guards marching. /FILE
“In a market economy, businesses start and fail every day. Some hire some fire. Some grow some shrink. We measure economic performance by aggregates i.e. macro level outcomes. As they say, one swallow does not make a summer. Further evidence why the law should be a second degree,” Ndii commented.
The company, which wrote to the Ministry of Labour and Social Protection, termed the ongoing reduction in business trading occasioned by the effects of the harsh economic challenges that have occasioned to reduction in revenue and high costs of running the business as reasons for this decision.
It thus, and regrettably, advised the Ministry of its intentions to declare several positions redundant. “This letter therefore serves as a notice of redundancy pursuant to the provision of the Employment Act, 2007 Section 40 (1),” the letter read in part.
The redundancy exercise commenced on November 4, 2024 which will see approximately four hundred (400) employees based in various locations in Kenya in both categories of management and unionsable cadres lose their jobs between November 4. 2024 and April 2025.
“G4S Kenya Limited remains fully committed to the Kenyan Market. We have every intention of implementing solutions that will secure employment for our employees whilst sustaining positive business performance,” the company however asserted, adding “We wish to assure the Ministry that we shall adhere to all the minimum legal requirements stipulated for this kind of action.”
The announcement by G4S has drawn the attention of many Kenyans including economists and the political class who have expressed mixed reactions towards the decision. While some viewed it as a painful but necessary business decision, others shifted blame to the government.
State Of Kenya Unemployment & Economy 2024
Despite 2024 nearing a close, Kenya’s unemployment rate has made for sorrowful reading, with the worsening rate this year reflecting a tough economic environment that has been characterised by a slowdown in business activity and hiring freezes.
In an October report, the World Bank put the unemployment rate at 5.7 percent in 2024, slightly higher than the 5.6 percent registered last year, because gross domestic product (GDP), or the sum of all the goods and services produced in the country, was expected to slow down to five percent from 5.6 percent last year.
Data from the Kenya National Bureau of Statistics showed that real GDP underperformed in the first and second quarters of this year due to a contraction in sectors such as building and construction and a flat growth in manufacturing.
The Stanbic Kenya Purchasing Managers’ Index (PMI), which measures the performance of key private sector indicators such as output, new orders, and employment, dipped slightly to 49.7 from 50.6 in August.
This year, the economy was rocked by a month-long youth-led anti-tax protest that created economic uncertainty and delayed consumer spending decisions. The resulting political uncertainty, which rocked President Ruto’s administration, exacerbated the cash flow challenge as interest rates rose amid elevated cost of living pressures.
Kenya’s unemployment rate is highest among the youth in the informal sector, the largest employer, where earnings are little and erratic.
Job seekers holding up placards. /FILE
The Kenyan government has also been a victim of the sluggish private sector growth, with layoffs and a freeze on bonus payments for workers in corporate Kenya resulting in lower-than-expected collections in payroll taxes.
For instace, the Kenya Revenue Authority (KRA) missed its payroll tax targets by Ksh25.8 billion in the year to June, reflecting the impact of Kenya’s soft economy on jobs and wages. Income tax collection fell by Ksh49.9 billion in the financial year ending June as the private sector grappled with a turbulent environment characterised by shrinking sales and high operating costs.