The poor run witnessed at the Nairobi Securities Exchange in the past two weeks and dwindling exports is now worrying Kenya’s private sector.
This comes as businesses in different parts of the country continue to count losses from looting and destruction of property, during the anti-government protests.
Market data shows investors lost about Sh63 billion in paper wealth over the two weeks that the country witnessed back-to-back deadly protests, as the NSE market capitalisation dipped to Sh1.6 trillion.
This is down from the Sh1.8 trillion it hit in quarter one (January-March), which the regulator, Capital Markets Authority, attributed to heightened trading activities.
The NSE All-Share Index (NASI), NSE 25– market capitalisation-weighted index that tracks the performance of the top 25 companies, and NSE 20, recorded declines in share price indices by 4.8 per cent, 4.2 per cent and 5.2 per cent, respectively, last week.
Similarly, market capitalisation, equity turnover and total shares traded declined by 4.8 per cent, 12.6 per cent and 7.1 per cent, respectively, according to official data.
Bloomberg has also ranked Kenya’s capital markets among poor performers in recent months on the back of declining investor confidence in the economy.
Led by the Kenya National Chamber of Commerce and Industry (KNCCI), the private sector is now concerned the country’s economic growth could be on a downward roll, given that the disruptions have also led to significant interruptions in the supply chain.
There are also concerns on increased operational costs, decreased consumption and investor confidence, and job losses.
“The cumulative effect of these issues is a substantial strain on our already fragile economy,” KNCCI president Erick Rutto said.
Kenya’s exports have also been affected, wiping out gains made in the first quarter of the year (January-March), when favourable export earnings from tea and horticultural commodities resulted to a 28 per cent increase in merchandise exports, to Sh298.4 billion, from Sh259.1 billion in Q4 of 2023 (October-December).
“As the organisation responsible for issuing the ordinary certificate of origin, certifying that a product is from Kenya, KNCCI has observed a worrying 17 per cent decline in export activity since the protests began,” Rutto said.
KNCCI wants the government to expedite engagements to address the concerns raised by the protestors in order to restore normalcy.
The Kenya Private Sector Alliance and Kenya Association of Manufacturers are equally concerned over the disruptions.
The two bodies said the right to peaceful picketing should not hut business operations.
“Kenyans and businesses are facing challenging economic times, and their voices call for re-evaluating our economic model to ensure Kenya's economic growth agenda is not compromised,” Kepsa said in a statement.
The disruptions could further dent the economy, industry players say, whose growth declined to five per cent in the first quarter of 2024, compared to a growth of 5.5 per cent in the corresponding quarter of 2023.
According to the Kenya National Bureau of Statistics (KNBS), the growth, albeit slower, was primarily buoyed by robust growths in agriculture, forestry and fishing activities (6.1%), real estate (6.6%), financial and insurance (7.0%), information and communication (7.8%) and accommodation and food services (28.0%).
The manufacturing sector’s contribution is estimated to have decelerated to 1.3 per cent compared to 1.7 per cent in the same period last year, with the construction sector also registering a decelerated growth of 0.1 per cent, down from the 3.0 per cent.