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June 25, 2018

Leaders must stop economic suicide

Election years in Kenya are a tough time for the business community
Election years in Kenya are a tough time for the business community

Where has all the money gone this year? Individuals and markets are experiencing a credit crunch, with the consumer index going south due to the drastic reduction of disposable incomes.

It has to do with 2017 being an election year. Election years in Kenya are a tough time for the business community. This is mainly due to the high risk associated with the presidential poll outcome as is currently happening. Investors and the business community hold back their money in a wait-and-see approach.

This scenario worsened on September 1 after the Supreme Court ruling that quashed President Uhuru ’s popular reelection for a second term on August 8.

In less than 10 minutes after the ruling, the Nairobi Securities Exchange lost over Sh50 billion, in what was obviously a clear show of political uncertainty. The NSE index dropped by a scary 7.41 per cent. To avoid a complete crash at the counters, the bourse halted trading for a moment for the jitters to settle.

According to financial analysts, exchange markets do not lie. It is like they have a life of their own. The immediate negative reaction at the NSE is a symptom of the fears arising from the ruling.

Clearly, it created more uncertainty in a situation that is still fluid. Many Kenyans had just started getting used to continued stability. Our usually heated political campaigns are back with a bang, which will definitely affect the business environment for the next couple of months.

The unprecedented ruling should not be a problem in a democracy if such a significant ruling is based on clear, substantial and verifiable evidence.

On the flip side, this should be a lesson to the business community. The country needs to finds ways to psychologically buttress the markets from political shenanigans and shocks.

Recently, a Kenyan in the UK recounted how the British — and I believe much of the developed world — simply walk into a designated voting venue, cast their vote and walk out to continue with their business. They have a lot of trust in the process and outcome of their elections. This attitude reflects positively on their perennially stable economies.

That is political maturity. Why have we let a one-day event ruin what we have built through sheer hard work over the years?

True, election outcomes have certain consequences that cannot simply be ignored. In America, a mature democracy, there were fears Donald Trump’s election as President in November 2016 would mess up the economy, due to his perceived unorthodox views and governing style.

The incessant bickering and change of goal posts by Raila Odinga and NASA are damaging, even for our legendary resilient economy. The economy can only take so much pressure before reaching breaking point.

The IEBC and Jubilee have bent over twice to ensure Raila and his alliance are comfortable with the status quo, if only not to worsen an already tense situation. Unfortunately, this has been met with more unreasonable demands.

It is time the business community came out more assertively to impress upon belligerent politicians that their selfishness and greed for power is ruining the same resources they are so desperate to manage. Their protracted actions amount to an act of economic sabotage.

Business lobby groups such as Mkenya Daima must be given more force. Recently, the group called for restraint, sobriety and maturity in our political processes, particularly elections. This includes respect for the rule of law, and peace at all times. All should heed this call.

 

Senator, Kirinyaga county

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