The Wall Street Journal | Anxiety Over Instability Clouds Kenya Vote

Posted February 26, 2013 by Ugandan Diaspora News Team in Kenyan Elections ~ 3,750 views


People participate in the ‘National Repentance in Kenya’ event in Nairobi’s Uhuru Park on Monday, which organizers said was aimed at promoting a peaceful national election next week.

Investor anxiety is taking a toll on Kenya as East Africa’s largest economy prepares for Monday’s elections. The country has emerged as a beachhead for foreign direct investment on the continent, and the African home for many multinationals. General Electric Co. GE -2.54% International Business Machines Corp., IBM -1.78% Standard Chartered STAN.LN -0.85% PLC and Google Inc. GOOG -1.12% have all expanded offices in Nairobi recently.

But hovering over an otherwise bright regional outlook is an ominous unknown: whether Kenya can hold together through another contentious vote. The answer could determine whether Kenya’s economy meets projections of close-to-6% growth over each of the next two years, driving expansion across the region, or falters amid political instability—and pulls its neighbors down, too.

Some, like Uganda and Tanzania, are growing at even faster rates. But they are also less developed, and lean on trade, investment and expertise from Kenya, the regional giant. “There’s a significant risk of violence and a disputed outcome, which is worrying for lots of reasons, not least of which is the economic uncertainty that would hit Kenya and markets here,” said Cedric Barnes, Horn of Africa project director for the International Crisis Group, a Brussels-based anticonflict group.

Businesses fear a reprisal of the spasms of ethnic violence that followed the 2007 election, leaving hundreds of people dead and several hundred thousand displaced from their homes. In 2008, as violence peaked, growth crashed to 1.5%, from 7% the year before.

Those jitters are weighing on Kenya’s currency. The shilling has shed almost 5% of its value against the U.S. dollar over the past eight months as businesses stockpiled foreign currency. The depreciation would have been even sharper, economists said, had Kenya’s central bank not spent some $440 million this year to prop up the shilling.

Representatives for GE, IBM, Standard Chartered and Google all said they aren’t pulling back or reconsidering their investments ahead of the vote. “We’re not doing anything unusual. We hope for a peaceful election,” said Deo Onyango, GE’s commercial growth director for East Africa. But some Kenyan manufacturers are delaying investments in new plants and machinery until after the election, said Rajal Upadhyaya, managing director of Catalyst Principal Partners, a Nairobi private-equity fund.

Others have pooled $5 million through the Kenya Private Sector Alliance business association to buy nonpartisan newspaper ads, sponsor soccer tournaments, and host events promoting a fair and peaceful vote.

“In the last postelection violence, the private sector lost employees, goods couldn’t move, property was stolen and destroyed,” said Carole Kariuki, the alliance’s chief executive. “We saw a lot of the tensions hadn’t been resolved, so we wanted to take an active role rather than waiting for the fallout.”

Kenya’s electoral commission says it has registered about 70% of 21 million eligible voters using new biometric-identification kits that will identify voters by their fingerprints. On Election Day, voters will be selecting more officials, at more polling stations, than ever before. New local assemblies and county governorships have come into existence under a new constitution ratified in 2010.

Although the constitution aims to quell ethnic tensions—in part by transferring some authority to local governments from the presidency—many critics complain the changes don’t go far enough. One of the biggest concerns is that some of the top presidential candidates are the same people accused of stoking violence during the previous vote.

In December 2007, supporters of Raila Odinga rioted after President Mwai Kibaki was declared to have won a second term. Their anger spread and splintered along ethnic lines. The attacks involved members of Mr. Kibaki’s Kikuyu tribe and reprisals from Mr. Odinga’s Luo tribe and other groups.

Uhuru Kenyatta, the 51-year-old son of Kenya’s first president, Jomo Kenyatta, allegedly organized squads of Kikuyu supporters to embark on a wave of retaliatory killings. Last year, the International Criminal Court indicted him for crimes against humanity.

Today, Mr. Kenyatta is deputy prime minister—and a top presidential candidate who is running virtually even with Mr. Odinga, according to a poll released on Friday by market-research firm Ipsos Synovate. The charges against Mr. Kenyatta mean that if he is elected, the leader of a critical U.S. ally in a turbulent region might be shuttling between managing East Africa’s biggest economy and defending himself at The Hague. Mr. Kenyatta vows the proceedings won’t distract him.

“If the people of Kenya do decide to vote for me as their president I will be able to handle the issue of clearing my name while at the same time ensuring that the business of government continues,” Mr. Kenyatta said in a presidential debate this month.

Still, his opponents capitalized on the awkward prospect of Kenya’s president making regular trips to The Hague.

“I know that it will pose serious challenges to run a government by Skype,” said Mr. Odinga, who is prime minister and a leading presidential candidate. (Mr. Kibaki is stepping down after reaching the two-term limit.)

Such uncertainty is a challenge to businesses in Kenya, too. If Mr. Kenyatta is elected and stops cooperating with the ICC, as many analysts worry he might, Kenya could face sanctions from the European Union and other governments. Such steps would make it difficult for businesses to keep up relationships with suppliers and investors abroad.

“There’s a level of apprehension given what happened in 2007-2008,” said Japh Olende, the Nairobi-based head of East Africa for insurer American International Group Inc. AIG -3.75%

Each Friday afternoon leading up to the vote, Mr. Olende has led AIG employees in singing Kenya’s national anthem, a small attempt to promote solidarity. He said he isn’t sure such modest gestures will add up to a more peaceful vote. “This is a wait-and-see situation,” he said.

Write to Patrick McGroarty at

About the Author

Ugandan Diaspora News Team

Ugandan Diaspora News Online is an independent, non political news portal primarily aimed at serving Ugandans who work and reside outside Uganda. Our aim is to be a one stop shop for everything Ugandan and the celebration of our Ugandan heritage.

One Comment

Leave a Response