Economy To Lose Ksh 9.1 Billion, 57,000 Jobs Over Bar Closure

By Nsunjo Erica

The Alcoholic Beverages Association of Kenya (Abak) said that continued closure of bars will cost workers, sorghum farmers, and the government 9.1 billion shillings and More than 57,000 jobs in three months to September.

All bars in Kenya were shut down on March 22 as part of measures to combat the spread of Covid-19. The restrictions were later eased to selling takeaway alcohol to customers however, the businesses are recording losses every day.

Abak, which brings together key players such as Kenya Breweries Limited (KBL), says the measures put in place by the government have completely reduced the consumption of alcohol which explain the loses,

The association added that the continued closure of bars also triggered reduced demand for products such as barley and wheat used to produce the beverages, the suppliers are also recording losses.

According to Abak, Pubs, Entertainment, and Restaurants Association of Kenya warned that about 80 percent of its members risk closing shop permanently as operating costs such as rent pile following losses.

According to Abak analysis, job losses across the alcohol value chain that includes farmers and factories will hit 57,417 resulting in foregone revenue amounting to 2.72 billion shillings.

Abak said that according to its calculations, job losses and reduced consumption of alcohol is yet to cost the national government 5.88 billion shillings in excise duty, value-added tax and excisable goods management system (EGMS) fees.

The Association further said that it expects demand for barley and sorghum to fall by three million kilograms and 4.8 million shillings kilograms respectively taking away 419 million shillings from over 6,300 farmers.

Additionally, reduced demand for both grain and finished goods is expected to cost transporters Sh760 million. County governments are also expected to take Sh3.4 billion hit on cess and liquor license payment as bars remain shut.