Fears That Kenya Chaos Could Halt Economic Boom

Posted on 2 January 2008. Filed under: Economy, Humanitarian, Insecurity |

The bitter dispute over the Kenyan presidency could have long-lasting economic repercussions, observers warn, fearing that financial turmoil could quickly derail an, until now, booming economy.

Considered an investor-friendly haven of relative stability on its way to becoming an “African Tiger”, Kenya has experienced its worst political unrest in 25 years since a controversial presidential election on December 27.

The crisis stemming from President Mwai Kibaki’s disputed re-election affects everyone from the financial powerhouses to people like Rose in the massive Nairobi slum of Kibera, where livelihoods are immediately under threat.

“First it was because of election day, then it was because they were busy cheating on the results; we have had no electricity and no water for a week, now there is nothing to eat,” said the 24-year-old mother of two.

A few yards away, the Toi Market was completely levelled by rioters who went on the rampage following the announcement of Kibaki’s victory, which defeated challenger Raila Odinga said was obtained through widespread rigging.

“We had 3 000 traders here, as well as 3 000 other people employed in the market, which if you include the families and the customers, means that 200 000 people depended on this place,” said Toi market traders’ association chairperson Ezechiel Rema.

Millions of Kenyan shillings worth of basic food goods, shoes and clothes went up in smoke on Sunday night when marauding gangs of rioters set ablaze stalls reportedly owned by members of Kibaki’s Kikuyu tribe.

Prices of basic goods have consequently more than doubled in the sprawling slum.

“The big men are fighting it out over the election, but if a compromise is not reached soon, we will just be left here to die,” said 63-year-old John Okwiri, clasping a mangled container cap, the only object he could salvage from his little coffee shop.

With a series of national holidays granted by the government for the election, the Christmas holidays and the ensuing crisis, the country has been at an economic standstill for a week.

Fuel shortages were beginning to cripple businesses not only in Kenya but in neighbouring countries such as Uganda.

Many imports needed by the Great Lakes countries arrive in the port of Mombasa and pass through the whole of Kenya before reaching their destination.

Business leaders hoped the turmoil would cause only a temporary economic blip in Kenya, which has boasted average growth of 5% for the past five years and is home to one of the world’s fastest growing stock exchanges.

“Such violence does not augur well for business as it leads to additional costs and deters investment,” said Betty Maina, head of the Kenyan Association of Manufacturers.

The Kenyan shilling, which firmed up significantly against the dollar in 2007, was expected to fall when markets re-open on Wednesday, as is the stock exchange.

The darling of foreign investors in East Africa, Kenya will be lucky to emerge unscathed on an increasingly competitive regional scene, analysts said.

“Uganda and Tanzania must be quietly rejoicing, as they could be getting a bigger share of donor money,” said a senior official from a Nairobi-based Pan-African bank.

“What is certain is that Kenya’s reputation has been dented … but it’s still very early to measure the impact, we’ll see how markets react on Wednesday,” the banker added.

Standard Chartered’s Chief Africa Analyst, Razia Khan, said that the shilling and the markets could slump if the violence did not subside and a swift outcome to the political stalemate was not found.

“Although the economy has done well, the electorate has still indicated its preference for change, and perhaps an impatience that more should be done to tackle graft,” Khan said.

The analyst stressed that despite the latest crisis, Kenya’s economy was still vibrant and a Parliament set to be dominated by the opposition “will create more pressure to deliver meaningful change, as quickly as possible”. — Sapa-AFP

Jean-Marc Mojon
Mail & Guardian

Make a Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

2 Responses to “Fears That Kenya Chaos Could Halt Economic Boom”

RSS Feed for Kenya Environmental & Political News Weblog Comments RSS Feed

It is virtually impossible to exercise First world’s style democracy in third world Africa. Most of our leaders practice it simply to please the first world because it has been imposed on them. They want to appear democratic in the eyes of the first world while in their hearts, they are not ready to concede defeat (eating the cake and still have it!). They believe that being a president gives you the right to be owner of that country while the rest are just tenants. This is also fueled by the fact that some first world leaders are using our presidents as their agents to loot our wealth in exchange for guaranteeing their presidency and ill-gotten wealth. That is why it is very difficult for Africans to break the the chain poverty.
In my opinion, we need to have African version of democracy to get away with rigging problems and its consequences in terms of lives of innocent civilians. The version shall be as follows:

1. We need to have an African Electoral Commission and African Electoral Court located at AU Head Quarters. The two instruments shall be manned by competent staff picked from member states who have a record of high degree of integrity in the course of executing their duties.

2. All elections in African countries shall be conducted, coordinated and concluded by African Electoral Commission. The team from the commission will have to be formed to conduct any election in African countries. The membership of that team shall not include individuals from the country in the process of election. Each polling station shall have at least two representatives from this commission who have final authority on the conduct of the electoral process. Observers from countries outside the continent will have to be invited to witness the exercise and give their opinion on the transparency of the exercise.

3. The results of the election shall be announced by the Chairman of the African Electoral Commission at his head office, in the presence of all substantial contesters (those who got at least 5% of the votes).

4. In case of any disagreement, the complaining part shall lodge his/her complaints with African Electoral Court, which shall, within the period of six months, settle the appeal and adjudicate the case. The decision given by the court shall be final.

I believe that institutionalization of such a mechanism will, by and large, resolve the dirty processes we used to witness in Africa and increase the confidence of the people and their leaders. It will give Africans opportunity to make critical decisions affecting us through our own instruments and hence put continental interests first.

In case, you agree with this way of thinking and want to see this charted forward, please contact me via the following email- kalutajr@hotmail.com.

I will be happy to form a network of like-minded Africans to ensure that the above proposed mechanism is propagated and institutionalized for the benefits of our continent.

The problem with your analysis, Jean-Marc, is that it presumes that the economic growth in Kenya these last years has been real.

Headline GDP rates have grown, but this has partly been due to statistical manipulation and trends which have not impacted the majority of Kenyans (for example it is said that 7% of Kenya’s 6% GDP growth last year comes from Safaricom alone).

The reality is increasing commodity prices, increasing landlessness and an increasing population which Kenya’s shackled economy cannot create jobs in sufficient numbers for.

Kenya’s stockmarket growth is also something of a mirage, spurred on by credit available more easily and more cheaply than in the past.

My point is this: the unrest does not threaten growth, lack of ‘real’ growth is a catalyst to the problems.


Where's The Comment Form?

    About

    A blog created to cover environmental and political information in Kenya with a view to promoting POVERTY ALLEVIATION through creating awareness of the Millennium Development Goals

    RSS

    Subscribe Via RSS

    • Subscribe with Bloglines
    • Add your feed to Newsburst from CNET News.com
    • Subscribe in Google Reader
    • Add to My Yahoo!
    • Subscribe in NewsGator Online
    • The latest comments to all posts in RSS

    Meta

Liked it here?
Why not try sites on the blogroll...

%d bloggers like this: