Connect with us

Hi, what are you looking for?

Capital Business
Capital Business

Kenya

Bad politics risky for Kenyan economy

NAIROBI, Kenya Feb 26 – Political tension and uncertainty in the country is likely to reverse economic growth realised in the last two years according to an economic survey released by investment bank Renaissance Capital.

The survey shows entrepreneurs less optimistic with investing locally as they wait to see whether the political climate will change.

Renaissance Capital Head of Research Erick Musau said that while their projections put growth at 4.3percent, economic shockwaves are hard to rectify which could stagnate economic growth.

“Economic shocks are hard to recover from and we feel that if the economy was to take a fall, it may take a toll on any projections we come up with,” Mr Musau said.

The Outlook shows it will take much longer to get back to the 2007 growth levels of 7percent indicating that if all things remain constant it could be attained by 2012.

Mr Musau however said the run up to the 2012 elections adds another twist to predictions as political temperatures will be at a high.

“Since 2007 when we had growth levels of 7.1percent it is very clear to us that it it’s taking much longer to get back to those levels,” he said.

Mr Musau however said growth is likely to be supported by the lagged effect of the loose fiscal and monetary policies implemented in 2009.

He also expects factors in resilience by private sector players to grow business in 2010 as a likely driver of economic recovery.

The outlook also advises investors to look away from the capital markets and put their money in key economic sectors such as agriculture, consumer and service industry, which do not have sufficient listing at the stock market.

Advertisement. Scroll to continue reading.

Sectors likely to drive growth in 2010 are hospitality, financials, agriculture and telecoms

“We estimate a 25 percent return with 30 percent probability in the bull scenario assuming that economic performance remains above 5percent supported by a higher than expected corporate earnings growth,” he said.

The firm estimates inflation will fall to 4.5percent in 2010 and that there could potentially be some room for lower interest rates and improved liquidity in the money market.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...