Kenya’s 2017 General Elections have been one of the most anticipated and closely monitored. For the first time, the sitting president, Uhuru Kenyatta was working to defend his position against a united opposition. Close to 5000 election observers from the EU, the Carter Foundation led by former US Secretary of State John Kerry, the Commonwealth led by former Ghana Head of State John Mahama, the African Union and other institutions were in the country to monitor the process.
Kenya’s voting oversight body, the Independent Electoral and Boundaries Commission (IEBC), on 11 August declared Uhuru Kenyatta the winner of the 2017 General Elections with 8.2 million (54.2%) votes against Raila Odinga’s 6.7 million (44.7%) votes. Six fringe candidates accounted for about 0.9% of the total 15.7 million votes cast. However, the National Super Alliance (NASA) led by Raila Odinga has rejected the results, citing electoral fraud and is set to file a suit with the Supreme Court to contest the results.
Moving forward
Kenyans turned up in large numbers to vote on 8 August 2017, a notable increase from the number of registered voters in the 2013 General Elections.
However since the challenges to the electoral process by NASA, the country has been on tenterhooks, and one week after the election, an uneasy calm is returning to the streets of Nairobi and other major cities.
But even as the Supreme Court decides on the way forward regarding the petition from the Opposition, the country’s economy needs to move forward, presenting a full in-tray of economic priorities for the President to address.
Kenya’s GDP growth dropped to 4.7% in the first quarter of 2017, slower than the 5.3% growth recorded in the same period in 2016.
A decision on whether to remove capping of the interest rates will be among the priorities as well as jump-starting growth in key industries and managing national debt.
Review of rate cap law
Pressure has been piling on the government to review the rate cap law introduced in September 2016, with financial institutions such as IMF and the World Bank blaming the legislation for slowing economic growth. The Central Bank has already received 16 requests from banks to review the law.
The banking sector has also claimed that the interest rate capping has affected profitability in the industry. Private sector credit growth fell to 4.3 per cent in December 2016 compared to more than 17 per cent a year earlier, according to Central Bank data.
Transform key industries
The private sector plays a crucial role in Kenya’s inclusive growth by providing employment and transforming the economy through funding and technological innovation.
According to the Kenya Association of Manufacturers, it is essential to create a certain long term business environment as a key ingredient in gaining and maintaining confidence in the manufacturing sector.
In order to build a strong manufacturing sector, ramping up infrastructure development will remain a key focus. Financing the infrastructure deficit in Kenya and across Africa will involve collective innovation and cooperation across both the public and private sectors. Traditional funding sources and reliance on donors may no longer suffice, I and innovation in the public and private sector must provide the necessary platform on which to accelerate infrastructure growth.
In Kenya, ICT is already playing an increasingly important role in affording opportunities to the youth. However, ICT’s development faces many hurdles, including inadequate infrastructure and high costs, paucity of skills, insufficient financing, global competition and IT security problems. Through private sector and government participation either through funding or technical assistance, these challenges can be surmounted.
Managing national debt
Kenya has borrowed heavily in the past decade to finance mega infrastructure projects that are laying its foundation to transition to a middle income country. The latest mega project is the 480 kilometer Standard Gauge Railway from Mombasa to Nairobi that it is claimed will revolutionize the Kenyan and East African transport sector. Kenya’s current debt stands at over Kshs. 44 trillion and going forward, the new administration will need to take care to manage its debt and sources of funding.
In conclusion
There is a lot to do and the new government needs to provide not only a business friendly policy environment but also improve infrastructure. Governance needs to be more robust while security always remains a concern for private investors. Yet even among all the challenges Kenya’s success story is undeniable.
