Kenya’s private sector activity dropped in July, undermined by the effects of public protests against the government which hurt confidence in the economy and disrupted some business activity, a survey showed on Monday.
The Stanbic Bank Kenya Purchasing Managers’ Index (PMI) fell to 43.1 from 47.2 in June. Readings below 50.0 signal a contraction in activity.
“Protests in Kenya caused disruption to the private sector in July, leading to a marked deterioration in business conditions,” Stanbic Bank Kenya said in comments accompanying the survey.
“Political instability led to a reluctance among customers to commit to new orders, while the protests themselves in some cases blocked access to businesses and prevented them from opening.”
More than 50 people have been killed since mid-June, according to the government-funded Kenya National Commission on Human Rights (KNCHR), after protesters began taking to the streets to oppose tax increases in a now-shelved proposed law by President William Ruto’s government.
The youth-led marches continued after Ruto withdrew the tax legislation, with protesters calling for the president to resign and an end to what they called widespread government corruption and inefficiencies.
The intensity of the protests has since reduced.
“Private sector business activity deteriorated, reflecting ongoing demonstrations and unrest in parts of Kenya for some weeks now, discouraging output and new orders,” Christopher Legilisho, an economist at Stanbic Bank, said.