The cost of 2017 elections to businesses

2.5 kilometers away from the heart of the Nairobi Central Business District lies Ngara Market. Every morning on my way to work, I see that the market is just beginning to wake up from its disturbed slumber that only lasted a few hours.

Shops are beginning to be stuffed and street vendors make the pathways extremely narrow forcing people to walk in a straight line like soldiers going to battle.

Margaret Wanjiru 41, is a small enterprise owner at fig tree market in Ngara. Business is bad. She has had less and less customers every day this year. For over 10 years, Margaret has been trading second hand clothes at this stall every day, tentative of what the future holds.

“On a good day, I make between Sh. 800 to 1000 depending on the number of items I sell,” she says with a hint of uncertainty bursting through her eyes.

That uncertainty has cost her a large sum of money. “You see, customers have been shying away because of the elections. We have not made money. Our Children have gone hungry. But what do we do?”

2017 has generally been characterized by polls and dramatic scenes in and out of court. The entire electioneering period has had an adverse effect on the Kenyan economy Vis-à-vis businesses.

The year kicked off at a slow economic growth due to effects of drought in 2016. Kenya’s economy expanded by 4.7 per cent, the slowest growth recorded since the third quarter of 2014.

Costs accrued to businesses and what it means

The 2017 General Election came with a heavy price tag. The Pre-election Economic and Fiscal Report released by the National Treasury in July this year estimated that the country was going to spend Sh 49 billion in the August 8 Election, translating to US $25.4 per voter.  Additionally, another 12 billion was spewed into the repeat presidential polls meaning tax payers forked out nearly Ksh 60 billion.

Let’s break it down. If this money was to be computed against an average population of about 45 million people according to the latest economic survey by the Kenya National Bureau of Statistics, each person would make away with about 13 million. Of the 13 million, take away the Sh 97,000 every Kenyan owes as debt and you are left with Sh 12.9million. 12. 9 million would buy you a 2Kg packet of Unga every day for over a year.

The Kenya Private Sector Alliance (KEPSA) estimates to have lost Sh700 billion by private businesses in the past four months. The period has been punctuated by deepening business uncertainties occasioned by hostile exchanges between government and the opposition. Most of the losses, according to KEPSA “came from frequent disruption of transport and industrial operations during the campaigns and protests that followed the nullification of the presidential election.”

The Nairobi Stock Exchange (NSE) lost Sh92 billion in market capitalization immediately after the nullification of the August 8 presidential election. It went ahead to lose another Sh38 billion on the trading session that followed.

How the Kenyan shilling faired

The shilling also received a beating, hitting an all-time low against the dollar. As of October 23, the Kenyan shilling was exchanging at a low of 103.75/85 against the dollar. The weakest rate so to say. The shilling came under heavy pressure as companies and individuals hoarded dollars ahead of the repeat presidential polls that were boycotted by the opposition. Central Bank of Kenya was forced to intervene, pumping in dollars to curb the instability.

Today, not so much has changed even after the re-election of Uhuru Kenyatta was upheld more than a week ago. The Kenyan shilling is exchanging at 103.35 against the dollar.

Public Holidays

The country has had at least 10 public holidays so far including national public holidays and those imposed by the Ministry of Interior. Again the Kenyan economy has lost close to Sh 10 billion during the holidays, impacting negatively on businesses. Small enterprise owners have been the hardest hit and will continue to bear the brunt with another public holiday coming up tomorrow (Tuesday, 28).

What top News-makers said on Economy

Paul Namayi, an Economics lecturer at the University of Nairobi, argues that “If a political settlement is not arrived at soon, the Gross Domestic Product (GDP) will fall just below the current five per cent as investors shy away, production will drop and the shilling will depreciate even further.”

William Ruto, Deputy President: “We are in a difficult season. Things have slowed down. For many Kenyans, work and opportunities are shrinking by the day and we are all feeling it whether you come from the east, west, north or south of our country.” (In the Jubilee campaign promo for repeat presidential election)

Patrick Njoroge, Governor, Central Bank of Kenya: “We are loud with our politics and that is not a surprise. The surprise element was nullification of presidential elections but I doubt if a second round of election will be significant on the direction of economy in the short term. (While addressing journalists in mid-September)

Meanwhile, for people like Margaret whose only means of survival are the sales they make per day can only hope that life returns to this market.

Seldom have people noticed this market's true beauty and enchantment. It lived like this every day. And with long forgotten secrets lying deeply buried in its roots, traders anticipate that it will keep on living.