NAIROBI, Kenya, Jan 10 – Economic experts and business executives believe that there will be a huge acceleration in the Kenyan economy if elections are handled well, but they warn that billions in revenue could be lost there is no peace.
Political analyst Aly-Khan Satchu has emphasised that Kenya’s capacity to mitigate shocks – political and economic – will be the single most important determinant if East Africa’s largest economy will achieve sustained high growth for the remainder of this decade.
“The economy remains deeply interconnected with politics, so therefore, politics will play a huge role in determining the prices at the markets,” he said.
“The election looms large and is by definition a high beta event. If the election is handled well, I expect a serious acceleration in the economy but if it is fumbled, the country and region will struggle,” he added.
Satchu pointed out that the Nairobi Securities Exchange (NSE) was ranked the 3rd best performing market worldwide in 2012 according to Bloomberg, but he emphasised that a political impasse like the one the country saw in 2007/2008 would be highly problematic.
Nakumatt Holdings Managing Director Atul Shah expressed optimism that Kenyans will go through the next elections triumphantly and peacefully.
“The level of political maturity witnessed this far despite the high political drama is encouraging although the electorate must continue holding current and aspiring leaders to account, particularly as regards to the implementation of the constitution and Vision 2030,” he said.
He pointed out that due to Post Election Violence (PEV) witnessed in the last election, Kenya’s growth rate fell by a staggering 5.4 percentage points (from 7.1pc percent in 2007 to 1.7 percent in 2008).
Following the initial drop in growth due to the PEV, the country has experienced other domestic shocks that have clouded its economic outlook.
In 2009, a severe drought continued to cripple Kenya’s economic stagnation, while in 2011 and 2012 another drought and macroeconomic instability exerted their toll on the economy.
Capital Group Limited MD Cyrus Kamau is optimistic that Kenyans will be able to weather the storm.
“Historically, change is a good thing for business and for our country and this will be the first time we’ll be having an election under the stipulations of the new constitution,” he said.
“When you look at how the devolved government will be, you will note that there will be 47 counties. That means that each county will have its own brainchild and team to try and see how they can generate revenue. In other words, we’ll be having 47 new economies being generated in the country,” he explained.
Kamau called upon Kenyans to take personal responsibility in making sure that the elections are fair, free and peaceful.
“We are Kenyans. We own this country. We have to be responsible because voting just takes place in one day, but if we start fighting each other, it ruins a lifetime,” he emphasised.
“As a broadcast company, we will be preaching messages of peace to remind people that we have a responsibility to build this country irrespective of who takes power,” he added.