NAIROBI, Kenya, Jan 9 – The Kenya National Chamber of Commerce and Industry (KNCCI) has cautioned politicians against clamour for a referendum and premature 2022 succession politics that could hamper the country’s economic growth.
KNCCI National Chairman Kiprono Kittony says an unstable political environment may reduce investment and pace of economic development while poor economic performance may lead to government collapse and political unrest.
He says that there is need to focus on reforms that will increase economic growth and stay away from the politics of 2022.
“As a Chamber when we talk about political stability we mean specific kind of stability upholding the rule of law, strong institutions rather than powerful individuals, an efficient bureaucracy, low corruption, and an investment enabling business environment. Stable governance is crucial for economic growth as governance goes well beyond just politics,” he added.
The World Bank has projected that Kenya’s economy will grow by 6.02 per cent in 2019.
“This positive outlook could however be affected by the high octane politics that is gaining momentum,” he noted.
He says despite the positive outlook projected by the World Bank most businesses are still struggling to recover from the prolonged election cycle of 2017.
Eight listed companies issued profit warnings to investors in 2018 compared to six companies in 2017, despite the improving macro-economic environment in 2018.
Financial services, manufacturing and trade sector companies have dominated profit warnings by listed companies over the last economic cycle.
The companies include Deacons, UAP Holdings, Bamburi Cement, Sameer Africa, HF Group, Britam Holdings, Kenya Power Company and Sanlam.
According to analysts at ICEA LION Asset management, direct costs, operating expenses /admin costs and credit defaults appear to be key drivers of major declines in profitability of listed companies.
The 2022 succession politics have already started playing out with some politicians from the ruling party now claiming that they do not owe Deputy President William Ruto any ‘debt’ come next General Elections.