KEPSA warns politics could derail investments

February 21, 2011

, NAIROBI, Kenya Feb 21- The Kenya Private Sector Alliance (KEPSA) is warning that the ongoing political squabble over nominations to constitutional offices is killing investor interest in the country.

KEPSA says the main cause for concern is the slow implementation of the new Constitution that continues to generate political debate, which has got foreign investors anxious to explore opportunities in Kenya.

Briefing reporters on Monday, KEPSA Chairman Patrick Obath said this could see Kenya lose out to neighbouring countries, as uncertainty remains a major concern for investors.

"There is a slowdown in enthusiasm for investment as well as caution about coming to Kenya because of the perceived risk on the country not being safe," Mr Obath said.

The country is currently embroiled in a political impasse pitting President Mwai Kibaki and Prime Minister Raila Odinga over the nomination of four key state officials. The PM maintains he was not consulted in the nomination process.

On Thursday, the Speaker blocked debate on the list of the nominees in the House, heightening the political row between the two principals\’ camps.

Mr Obath said that already there had been a decline of investment from out of the country, further raising concern that the situation could get worse if the political situation remains unchecked.

"This has not been officially announced but from the information we are getting from our members we know that is the case. The lack of additional investments to the country could slow economic development," he said.

The KEPSA chairman said the private sector was wary of the effects on business of any perceived or real uncertainty and political instability.

He argued the running of government and development of the country derives its funds from the wealth of business and should therefore be at the forefront of ensuring business has a conducive environment to operate.

"We demand that the political leadership in Kenya rise above partisan politics at this crucial time in the constitutional transition of the country. We are cautioning the politicians not to play to the public gallery through their public outbursts," he said.

The government has been championing the promulgation of the new Constitution arguing it raises investor interest in the country but its slow implementation is proving challenging.

KEPSA is however optimistic the local economy is resilient to resist short-term shocks but insist the political climate needed urgent change.

"Kenyans are a resilient people and business will continue as usual but political stability is still key to strong economic growth," he said.

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