Citigroup (CITI)
- Limited impact on economy if political crisis is resolved. It Matters little to the economy who won the election as private sector will continue to drive growth
- Share sell off at NSE could be a good buying opportunity as economic fundamentals unchanged
- President will use police and military to clamp down on protests which themselves will not last more than a few weeks
- Parliament loyalties will be split by president as MP’s vote with their stomach
- There’s little the international community can do besides pushing for reforms.
- Also in the pre-election period, the opposition may have been falsely buoyed by opinion polls which are not sound (& could the same thing have happened to Obama in New Hampshire ?)
Renaissance Capital (RENCAP)
- Crime wave has emerged under the guise of political riots
- Government may take all 12 nominated seats in parliament
- Reemergence of the civil society and NGO’s as source of political pressure and search for solution
- Main threat is if two parties don’t agree so may revise down the 6 – 7% GDP projections.
- Also prices have not factored in the chaos, so investors should hold off on buying.
Thanks to Silaha for the 2 reports – and who has also blogged some post-election predictions for Kenya
Treasury Officals:– from Business Daily
- Damage on the economy could cut the projected growth by as much as a half, if not worse.
As agricultural, financial services and tourism sectors are likely to under perform
- Treasury could be forced to craft a stimulus economic package to help reconstruct the affected regions and
- Lower the interest rates in the economy.
Central bank Governor - from Reuters
- Kenya can still achieve 8% growth in 2008
- Disruptions were temporary and will have a major impact on GDP growth
- Shilling’s depreciation was due to holiday period
- Safaricom IPO in first quarter of 2008
- Interest rates will not change
World Bank
(Hat tip Kumekucha) There’s a controvery brewing of the World Bank’s assessment of the election and resultant crisis
Excerpts;
- The considered view of the UN is that the ECK announcement of a Kibaki win is correct. More irregularities of consequence on the Odinga side than on the Kibaki side.
- The process of arriving at the result created a crisis of confidence due to missteps by (a) the ECK chair (who joked about possible rigging during a news conference), (b) the vocal EU observer who was not thorough and precise in analyzing information provided to him (c) the lack of preparation by Kibaki’s party in dealing with a highly media-savvy opposition.
-Moving forward. One option being explored is getting them to agree to a recount which, by law, has to be done through a petition to Kenya’s High Court. Eminent persons from abroad would monitor this recount. Meanwhile, Kibaki would proceed to form a Cabinet, possibly with some participation by Odinga supporters. It is unclear what would happen if the exercise arrived at a different result from the ECK decision. The gamble is that this would not happen and that even if it did, both sides would have a face-saving way to accept a change in course via-a-vis their supporters
This is not the first time the first time that the land-lord-tenancy arrangement between the President and the World Bank has been put to question – see here and here
Finally;
Not sure if she’s a banker, but Kenyanentreprenur argues that what Africa needs are development minded dictators since we are not ready for democracy – and i hope we won’t be having this debate in 2012!
My own take is that the people at the Coast, Nyanza, Rift Valley and Western provinces need to start rebuilding their lives and their industries - otherwise they will be left behind. Rioting in your own community is dumb as you destroy businesses that deliver services and create jobs within the community. So pass that message along with any peace & sympathy messages you convey. Also watch NTV's great Voices of Reason program on Youtube that looks at pre- and post-election issues (more on that later).
13 comments:
Main thing is that the economy(in which we all have a stake no matter how small), isn't going to repair itself. All of us who can, need to go back to working, investing et al.
And those who can, start looking at ways to help the displaced pick up the pieces.
One of the ironies of those who have gone about looting and burning. Come tyhe end of this month, all the politicians that they ostenbly doing this for will still get their Ksh800k per month.
1 - What's this BS about 1/2 a cabinet? It stinks to high heaven. The major posts are gone:
VP, Defence, Finance, Agriculture, Local Govt...
Who wants Gender except for the financial package!!!!
Kibaki didn't spare much thought for the dying children either. Only the kyuks think kibaki was duly elected.My bro worked with pnu campaighn in Thika and he told me pre-election, things didn't look good and they will get out pple to vote but stealing votes was on their cards.He hasn't called me since this stuff went down coz we argued heatedly and my prediction came true, pple died. Both kibaki and Raila LOVE POWER don't be fooled.
As for the economy, folks need to learn that a rising tide lifts all boats. We need the economy to grow to alleviate poverty in Kenya.
Kenya has some of the highest inflation rates in the country and some of the highest debt service ratios. We act as so there is so much money in the treasury and its just a matter of better tribal arithmetic to take us to nirvana.
The momentum has been lost. It will take 3-6 months to get the traction IF peace prevails.
Whereas nairobi is almost back to normal, that is NOT the case everywhere:
Kisumu - CBD virtually destroyed. It needs a Marshall Plan but kibz isn't interested in helping them.
Eldoret - The business community has been run out of town. They will return albeit slowly.
Nakuru - Similar to Eldoret but less severe.
Note that Nakuru & Eldoret were teh hubs for Rift Valley thus agriculture will take a hit as the produce can't get to the market.
Police report on Colin Bruce:
http://www.kenyapolice.go.ke/News36.asp
No matter how fast our economy grows, unless we fix poverty and tribalism issues we will not have the fundamentals to sustain the growth.
We urgently need to address these issues to ensure we can sustain any economic growth. After these events, I am more than convinced that the Kenyan economy can be brought down in less than a week.
As for Kibaki hardcore supporters remember, what goes around comes around. In Moi days we were all fighting the same fight, right now we seem to be on the receiving end.
You have failed our institutions - Judiciary/ECK and I can bet my life on this, someone else will abuse these systems in the future and you will be on the receiving end.
MainaT: True, I feel bad for all business people who have lost property. It remind me of the '94 LA Riots when no corporates would go back and re-build the black community for years, till Magic Johnson/Sony showed how it could be done
coldtusker: half cabinet is already full. It's even worse to have a top heavy cabinet of 40 ministers, 80 assistants. I agree that the government may let Nyanza,, Rift, Western wallow in their own mess. Already KCC has said they will not reopen milk coolers there
Mchovu: The post-election violence has exposed many faults/divisions in Kenya, and as has been pointed out - don’t mistake calmness in the country for peace.
I would personally like to hear something from the Nairobi Stock Exchange but they have probably been told to keep quiet. This could be a good time to buy up some depressed shares. An 8% grotwh rate for 2008 seems optimistic following the recent violence.
NO MORE VIOLENCE!
Dear Raila, haven't you had enough blood in your hands? Is this what it has come down to - power at all costs?
Did the murder of innocent children in your name mean nothing to you? Torn families, starving widows are weeping for Kenya. More people are jobless than ever before. The coutry's global image has been permanently tainted.
This is your legacy Raila, May God have Mercy on your cold, cruel, greedy, selfish, soul!
Kenyans are united in their cry for PEACE!
Coldtusker:
Your comments are quite telling:
Kisumu has been destroyed: Who destroyed it? and now you want kibaki to institute a marshall plan just for kisumu? The whole of kenya is poor and that's why people who are already poor should not have destroyed what little they already had.
Eldoret and Nakuru: The business community (read: the kikuyu's) have been run out of town. Again..by who? Isn't that What Raila and Ruto wanted when they talked about majimbo?
If you destroy the biggest and most successful entrepreneurial class in Kenya, everyone ends up suffering. Moi tried it for 24 years and Kenya's economy collapsed.
Why would any kikuyu businessman rebuild in either Kisumu or Eldoret and take the chance that it may be destroyed again in 5 years.
Kenyanentrepreneur.com
The recent crisis has shown just how resilient Kenya is as a country and Economy.Kenya withstood a massive shock to its internal security and Governance systems.
I doubt Uganda, Tanzania or even Zambia could have withstood such a massive internal crisis without external intervention.
We are feeding the displaced,talking peace through various fora all without having external parties coming in and asking the Media to preach peace.
The problem in Kenya is poverty,inequality and legacy issues such as Land distribution,The clashes are just symptoms of those problems.I hope we can treat the disease and NOT the symptom otherwise, the problems will be back in another 3-5 years
Food for thought:
Now that ODM-K is part of Government, Raila supporters represent approx 40% of Kenyans who voted.
Tables have turned. Majority of Kenyans (over 60% of voters) are now PRO-GOVERNMENT.
ODM preaches democracy. But what they mean is that "democracy" is RAILA. ODM Supporters are being manipulated by an individual hell bent on personal gains at all costs.
Don't kill your neighbor for Raila. Do you honestly believe Raila really cares about you?
When Raila gets what he wants, do you think he will send bodyguards to protect your children from revenge attacks when they go to school?
Do you want to sentence your own children to death?
Do you want to worry about safety fo your kids every time they are out of your sight? or every time you hear a noise at night?
Think long term. Let PEACE prevail!
Small minds think small thoughts. You are so Kibaki-centric you cannot even see his abuse of the country's institutions that he himself was crying over the other day while Moi was in power. But as always it was about the liver, it has been protected, but at what cost? WHO in Kenya is ever gonna trust a GEMA personality again? GEMA alone cannot birth a president. They have tried it this time, it's not firing. Kibs rigged to the death this election. He has reaped what he planted. Even Nyayo was not foolish enough to beg M7's goons to come kill Kenyan's on Kenyan soil!!! What patriotism Kibs has shown!!!
The deaths of all those peole killed lie at his door. NSIS warned him, but he wanted power so desperately. We also know about the oaths taken, some of you talk and boast about what you do; and how little you value life.
Revenge attacks? Try it, by all means. Kenya is MUCH, MUCH BIGGER THAN CENTRAL! Wake up and smell the coffee!!!! With all Centralists now in central (Haiya, majimbo came so suddenly I cant believe!!!) they can do what they want there.
Business people from central need not worry, local communities will comfortably fill the spaces Kyuks killed and stole to have. They are more needed in central, to increase crime and everything else that goes with them.
The party's just began, welcome folks. The music is not of your selection. Smell the coffee once more. Winning a skirmish does not equate to winning the war, and the journey is long. Feel the isolation
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