East Africa’s largest economy Kenya is optimistic about its economic future as it continues to recover from the COVID19 global and local shocks. Business activities across various sectors are gradually returning to pre-COVID levels, following the lifting of most restrictions. However, the forthcoming general elections in Kenya have raised concerns as they’re expected to be disruptive, at least on economic activities. According to ratings agency Fitch, Kenya’s general elections in August 2022 provide downside risk to the country’s development, especially in the second and third quarters of the year. Based on previous elections in 2012 and 2017, Fitch expects that the medium-term growth will stay at around 6%. Business Edge takes on Kenya’s growth as the elections approach. Tolulope Adeleru-Balogun and Dr XN Iraki of the University of Nairobi discuss the threats and opportunities that elections cause in Kenya.
A recent survey by the Central Bank of Kenya’s Monetary Policy Committee that sampled the opinions of business leaders in Kenya shows that the majority of them are optimistic about the country’s economic outlook, based on indicators such as Political stability, a stable economic environment and taxation issues. as Dr Iraki not only shares this optimism, he’s even more optimistic than these business leaders. “I’m even more optimistic than them for a number of reasons,” he says. “Kenyans have taken up COVID vaccinations and the run-up to the polls this year is more peaceful than it used to be.” As a result of these two factors alone, there is a likelihood that economic activities will be impacted positively. Furthermore, according to Dr Iraki, the profits declared by banks suggests that there is a measure of post-COVID recovery.
Business Edge also touches on the Fitch report that expresses concerns about elevated purchase prices and disruptions as a result of the coming elections, the impact of the Russia-Ukraine crisis on fertilizers and other imports, as well as the timing of fuel subsidy removals.