There’s every indicator that the Kenyan market is set for better times

Visiting the Masai Mara is truly an experience that stays with you for a long time. The exceptional beauty of the place is second to none. Tourists who come to visit Kenya from all over the world are not wrong: it is hard to imagine another place on earth where you can be exposed to the full variety of nature that God has created. Mammals, birds, flora, fauna – the abundance is breath-taking, every time anew.

 I like to take my kids there sometimes to teach them about the beauty of God’s creation. They are often mesmerised by what they see all around them, and completely forget about the existence of Youtube!

A true miracle.

One of the most memorable experiences we had during our most recent visit were seeing the majestic lions we met all over the National Park. Sometimes alone, sometimes in groups, they always broadcast a certain serenity and, at the same time, sense of grace. It is obvious that the lion has no one to fear in his kingdom, every other animal, and also us humans, respect him immensely. I think this has also to do with its majestic roar: Whoever has heard a lion’s roar, knows that he means business. One should keep his distance. That’s obvious from the sound alone, and we don’t need to see the lion hunt and kill his prey in order to be convinced that he is capable of it.

The force of sound is therefore remarkable. That is not only the case in nature, though. If you are, metaphorically speaking, a lion and not a mouse, your announcement is enough for other people to respect you, and, maybe more importantly, to act as if your announcement is equal to your action. We can observe this in many areas of life, private as well as public. But nowhere is this as pronounced as in national and international politics.

Because of the nature of things, businessmen are often the first to adapt to new circumstances. They want, after all, to continue to make money, without too much ideology behind it. Thus, if the market suddenly changes, it is usually a pretty good indicator for an anticipation of change in the near future.

Since the beginning of 2020, we have seen several of these indicators giving us strong signals. Now, we need to decipher them. Most people won’t bother to take the time to analyse these signals properly, and thus, most people aren’t successful businessmen. But when housing prices stop climbing, there can only be one reason for it: Investors foresee that the demand for housing will not grow.

How is this possible? Kenya’s population isn’t shrinking, after all! It seems to me that investors take President Uhuru Kenyatta by his word: They expect the government’s actions to yield, in the near future, a surge in the offer of affordable housing. This is in line with the president’s flagship program, the Big Four. And one of its pillars is affordable housing.

The government’s effort to provide Kenyans with affordable alternatives is observed by the market, and the market is acting on it. In a similar vein, we can see the repeated slashes in interest rates. Translated to real, non-economic terms, this means that the Central Bank considers that the risk of loan not being paid back in full continues to fall. First of all, this is great news for us all! Our economy continues to roar, and this will translate into a better standard of living for every Kenyan.

Yet, a multitude of decisions play into the macro-economic outlook of the Kenyan Central Bank. Amongst them are surely the fruitful discussion around the Building Bridges Initiative (BBI), the successful fight against the terrorists of Al-Shabaab, and the noticeable stepping-up of the anti-graft campaign. All these are signs of a high level of confidence in the future of the Kenyan economy and of the Kenyan state as a whole.

It seems obvious that Uhuru’s simple announcements of government programmes and policies are changing investors’ outlook on the future of our economy.

Uhuru’s roar does indeed resound far and clear. And after increased action in the past years, from arresting Cabinet Secretaries and Governors for corruption to waging an audacious campaign to ensure Kenya’s borders, even the sceptics understand: Behind Uhuru’s roar are sharp claws, ready to attack at any moment. 

Mr Mugolla comments on topical socio-political issues. [email protected]

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