On a typical Thursday, Martin Mugo, a hair designer, would have many professional women waiting for his much needed services at his beauty shop at the Reinsurance Plaza on Taifa Road, Nairobi.

But the familiar warm environment these days is a quiet afternoon with one or two clients stopping by.

"Client flow is slow these days," he says.

Since the country first tasted trouble after last year's General Election, such lukewarm scenes are currently being witnessed in thousands of small businesses across the city.

For Mr Mugo, January, the month in which the political theatre was full of chaos, also happens to be the best month when clients are just from holiday and getting back to work.

Though the political environment is now stable after the negotiations that led to a coalition government, business owners interviewed by Business Daily say they are yet to taste the economic dividend resulting from the calm political environment. Business has not returned to the level where it was just before hell broke loose over the complaints on the tallying of the presidential votes.

Then there was boom, but today the country is slowly crawling out of a downturn.

To Mr Mugo, the economic slowdown, rising fuel prices and electricity costs and food inflation will hurt his business even more.

The entrepreneur is not convinced about players like the Central Bank of Kenya (CBK) governor, Njuguna Ndung'u's, reported comment that "the worst case scenario is 4.5 per cent, the best case scenario is six per cent."

This came after he had denied that it had not been affected by the unfortunate events that followed the general election, last year. In that same year the economy was projected to grow by eight per cent. Now it seems that is going to be the opposite.

Growth measures

This bad news comes after companies big or small had put measures in place to grow and Mr Mugo was no different. Instead of growth now he is a faced will increasing overhead, which he says that he has been forced to absorb because he fears losing his clients.

"Every product I use has gone up by 20 per cent and the rent has gone up because of the 16 per cent VAT. I cannot even reduce my charges to attract clients," he says.

All the business people interviewed by Business Daily expressed the same views and with the 20 per cent inflation business is getting harder especially for those dealing in luxury products and services.

Luxury here meaning anything apart from food and shelter.

People like Davy Kimwele, a seller of second-hand clothes in a shopping centre in the heart of Nairobi West. Like the hair designer, his overheads have increased and he is not making sales.

"I used to go shopping every day, now the stall full of clothes that are not being bought," he says.

Nevertheless, that is not the end of his woes. He had gone shopping, but got confused because everything he wanted to put in his basket had become more expensive. He singled out the maize meal price as unbelievable.

The bulk of the Kenyan economy has a direct and an indirect correlation with agriculture (26 per cent of the GDP) and the most productivity area is the Rift Valley, referred to as the country's bread basket. And it was the heart of the post-election violence, displacing thousands the small scale farmers that are the majority in this sector.

Experts are saying that come September, there will be a food shortage especially if the farmers do not plant in time.

It is the biggest provider of jobs and also the top earning foreign currency from the tea, coffee and horticulture exports.

Although, the dollar is unstable globally, in the first two months, it had strengthened against the shilling and this had an adverse effect on John Ngung'u's import business of second-hand cars from Japan.

He had bought some cars during that time and they are currently lying in the showroom.

"The institutions providing financial arrangements withdrew," says Mr Ndung'u.

But still being an optimist that things will go back to normal, he called his supplier in Japan to import more cars but the Japanese was not willing to make the deal in dollars.

"I got the feeling he want to do the transactions in Yen," he adds.

The same unstable dollar is been blamed for the rising fuel prices with the growing demand from the two emerging giants, India and China. A barrel of cruel oil is $114 (Sh6,954).

The ever-rising fuel price has been a headache for John Kamau, a taxi driver. Now he has to charge Sh200 more for the same distance.

"When I started driving a taxi in 1999, a litre used to be Sh50 now it's Sh100," he says. However, he is finding himself absorbing that cost because people do not have the extra Sh200.

For Mr Ndung'u, the rising fuel prices mean that not many people will buy his cars. So, he is looking to concentrate on his other business; construction.

But he is pessimistic about this since his client tends to be the government.

He says the government is the biggest earner and the biggest spender and he does not see it spending most of Sh700 billion it budgeted this year.

Mr Mugo Kibati, the outgoing CEO of East African Cables and a director of Kenya Association of Manufacturers, concurs.

He says that if the economic slowdown persists it will have a direct impact on the building and construction industry.

New projects

He adds that the main players in this industry would be affected by the reduction in the level of new projects coming up as developers wait for economy to improve.

Mr Kibati even hints that they might be a possibility of some job losses because some of the companies have contract or casual employees who are brought in depending on levels of activity.

Back at the hair salon, Mr Mugo has taken to selling airtime to supplement his income.

"There is little profit in selling airtime but handling and getting it is easy," he says.