KENYA ECONOMY HIT HARD BY POLITICAL LIMBO

NAIROBI, From a slugging economic growth, job losses and rising concerns of food shortages and high costs, the administration of President Uhuru Kenyatta’s second term will have its plate full as he starts his last five-year term.

The administration will now be keenly watched by the business community with expectations that it will move quickly to prop up an economy greatly hit by the political stalemate that has dragged on since the country’s Supreme Court annulled the August presidential election.

This looming standoff between the government and the opposition has done more damage to the economy, scaring away investors, slowing down the economy and depressing tax collections.

On Monday, the Kenya Private Sector Alliance (Kepsa) said that the four-month electioneering period had cost the country $7 billion in losses, with most of it coming from the frequent disruption of transport and industrial operations during the campaigns ahead of the August 8 election, and the persistent protests after the nullification of the results later in September.

In the past one month alone, investors at the Nairobi Securities Exchange (NSE) have lost $2.27 billion.

The bourse has seen the monthly volume of trading drop by almost 50 percent to more than 490 million shares traded from a monthly high of 740 million, while the average traded volume before the August 8 election was 640 million shares data from Reuters shows.

The administration will have to work overtime to inspire confidence in all economic sectors.

Carole Kariuki, chief executive officer of Kepsa said that the current political situation has created uncertainty as investors adopt a wait-and-see attitude.

“This has impacted all the key sectors of the economy, consequently leading to a shrink in the local economic growth that comes with a new intensity,” she said.

Patrick Obath, a Kepsa Trustee, said that wholesale and retail businesses have been hard hit by political protests that have become frequent in recent weeks.

“The harsh political climate has serious implications as a medium, small and micro-enterprises employ about 85 percent of Kenya’s labour force. It is our wish that the current political situation is managed properly to avoid further losses,” Mr Obath said.

Source: NAM NEWS NETWORK