KENYA:Mobile payments drop Sh22bn in August over sluggish economy

CYNTHIA ILAKO

The value of cash used to pay for goods and services through mobile money platforms dropped by Sh22.55 billion, Central Bank of Kenya data has shown, highlighting a strain in people’s purchasing power.

CBK data show that in August, the value of cash used to pay for goods and services through mobile money stood at Sh286.34 billion. This represents a 7.3 per cent decline from Sh308.89 billion used for mobile commerce in July.

Analysts have attributed the slowdown to political uncertainty in the country, which has resulted in a general decline in business activities.

Genghis Capital research analyst Gerald Muriuki yesterday told the Star the general business environment has been adversely impacted by the prolonged electioneering period, which has resulted in a reduction in citizens’ purchasing power.

“With regard to the movement of money, the political environment and the business environment have not been favourable,” Muriuki said. “I think it will all depend on how the political scene will turnout. If the situation is not resolved, then these figures are likely to drop further,”

The cumulative value of mobile commerce for the eight months to August rose 10.84 per cent to Sh2.41 trillion from Sh2.17 trillion for the same period last year.

The Communication Authority’s fourth quarter report for the period between April and June showed that mobile commerce transactions account for at least 56.81 per cent of the total cash moved through mobile money platforms.

The country’s current political wrangles have had a negative impact on different sectors with travel agents citing a Sh1.5 billion loss in revenue over the past two months. This is also reflected in the tourism industry, where hotel bed occupancy, which is usually at about 70 per cent during this time of the year, is currently below 30 per cent across the country.

On Tuesday, the Kenya Private Sector Alliance estimated losses to a tune of Sh700 billion in the four months of the electioneering period. KEPSA vice chairperson Patrick Obath said the economy will face further turmoil should the political uncertainty continue. “The harsh political climate has serious implications as medium, small and micro-enterprises employ about 85 per cent of Kenya’s labour force. The education sector has also had its calendar disrupted and national examinations could suffer if the current political situation is not managed properly,” he said.

Similar sentiments have been shared across the board with the Kenya Association of Manufacturers, in its quarter-three barometer, citing up to 64 per cent of industrial manufacturers forecasting a zero or negative growth.

The report shows that 47 per cent of manufacturers maintain a pessimistic stance over the next six months, with managers indicating possible layoffs if the current political situation persists.

SOURCE:THE STAR