Often, elections pose the risk of destabilising the economy, thanks to a perennially chaotic and unstable political environment. Peace and stability are crucial. A crisis like the 2007/2008 post-election violence, in which nearly 1,500 Kenyans were killed, several hundreds of thousands displaced, with huge economic losses, must not happen again. prevented.
It’s not hard to see why there is a lot at stake in this election. President Uhuru Kenyatta’s second term is ending and Kenyans wish for a smooth transition. Already, the two major coalitions — DP Ruto’s Kenya Kwanza and Raila Odinga’s Azimio la Umoja — are embroiled in a cut-throat competition. The intensity is evident in the numerous opinion polls whose outcomes have see-sawed between the two. As we head to the polls this month, there is palpable public anxiety.
In 2013 and 2017, the country benefitted from a positive trend, with experts noting the economy remained relatively stable on account of “successful and peaceful elections”.
Rebound potential
Last month, a report by NSE showed that the bourse saw better performance in Q2 than Q1 in both equities and bonds markets, and there is cautious optimism that the markets are set for positive growth post elections. This follows a trend in the last elections, in July 2017, when foreign investor participation in the bourse was quite strong, recording around 80%, which was similar to what was recorded in July and October 2015.
Today, a big number of foreign investors are exiting the market while some are adopting a wait-and-see stance to see how things will pan out. The latest data from SBG Securities shows that foreign investors were net sellers as at July 8, recording net outflows of Sh855 million compared to net outflows of Sh773 million.
Investors, local and foreign, play a critical role in economic growth; as a result, the government, and all institutions charged with regulating and monitoring the elections must ensure credibility and peace.
Let’s strive for a peaceful, successful election so that we do not undo the gains we’ve painstakingly made after a scary Covid period. Similarly, after elections, we must actively work to diversify the country’s investment portfolio to boost direct investment.
