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Kenya: Economy shivers as politics takes center stage again

Kenya: Economy shivers as politics takes center stage again

Kenya

The Kenya Supreme Court ruling that nullified President Uhuru Kenyatta’s re-election came with a negative impact on businesses that were emerging from a slow ward down.

The matatu industry was the first to claim making a Sh75 million (about $729.000) loss everyday nationwide.

The National Chamber of Commerce and Industry said the country was losing billions daily due to the uncertainty.
The Nairobi Securities Exchange NSE reportedly plummeted Sh92 billion ( about $8.3m) by close of that Friday as investors scampered to cover their positions.

In comparison, the bourse lost Sh40 billion ( about $3.8m) after violence erupted during the disputed 2007 General Election.

On Thursday, though, investor wealth at the exchange rose above the Sh2.4 trillion mark for the first time in a week as the NSE continued to recover from last week’s slide on the back of political bickering.

In a review of the market reaction by Business daily, Stanbic Bank regional economist Jibran Qureishi told the Sunday Nation that investors’ initial reaction to the news was a clear indication of their fretting over re-emergence of election spending and what this would mean to fiscal consolidation highlighted in this year’s budget.

“On the other hand, the move by the court reflects a maturing democracy and strengthening independent institutions, and we should not discount this factor,” said Qureishi.

However, a number of business players have weighed in on the impact of renewed political duels between Nasa and Jubilee, which have heightened tension in the east African country.

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