Kenyan Economy and Politics: Over the past few months, the world has stood bewildered at the circus that the United Kingdom’s Brexit has become. What was supposed to be the beginning of the process of Britain’s economic transformation has turned out to be the object of global mockery and jokes. The confusion on whether to crush out of the European Union, accept a disadvantaged deal, or hold a second referendum has left businesses in Britain operating in uncertainty.
Currently, there are looming layoffs and massive business closures. Already, Honda has announced that it will be exiting the UK market. Toyota is also issuing warnings. And the forecast for the overall economic growth is not too bright. Under a no-deal scenario, the country’s GDP will be 9.3 percentage points lower after fifteen years in comparison to the economy staying put in the EU. Evidently, this fiasco reveals the extent to which bad politics and politically instigated decisions can hurt an economy. In fact, another case example of bad politics within an economy is Venezuela, where money has become worthless, food scarce, and violence a day-to-day occurrence.
One of the countries that ought to learn from these lessons is Kenya. Over the past few years, the country’s private sector has been subjected to political attacks that have ended up leaving the economy worse off. Take the 2017 economic year which was also a general election year. On November 4 2017, the National Super Alliance (NASA) asked their supporters to boycott products from three leading Kenyan companies, Brookside, Safaricom and Bidco. The opposition coalition accused these three firms of ‘perpetrating electoral injustices’! The accusations came shortly after the repeat presidential election of 2017, in which the NASA coalition refused to take part.
To begin with, Safaricom was accused of transmitting ‘doctored’ election results in the presidential election held on August 8 2017. The opposition, though, failed to table any evidence showing that Safaricom had conspired to transmit flawed results at the Supreme Court, or publicly before the media. Brookside on the other hand was accused of supporting the incumbent government. Up until now, the big question has been on why Bidco Africa was singled out. From any given angle, it seems that Bidco was targeted because of its role at the Kenya Private Sector Alliance (KEPSA), and its leader Vimal Shah’s role in business advocacy in the country.
Mr. Shah was first elected as the KEPSA chairman in April 2013. He succeeded Eng. Patrick Obath who served as KEPSA chair for four years. While electing Mr. Shah to this position, KEPSA also launched the National Business Agenda II. This was a blue-print that formed the basis of advocacy to improve the business environment in the private sector over the next five years to 2017. Evidently, Mr. Shah assumed the chairmanship of KEPSA at a time when the private sector was seeking ways of tapping investment opportunities in the devolved governments. Indeed, over this period, KEPSA has been central in investment pledges that have been made over the last seven years in multiple county investment forums. These county investment forums were not only in regions associated with the ruling party, but also in areas that are considered opposition strongholds. “This means that the main business for the KEPSA organization or the KEPSA chair was not to dilute or alter the political alignment of any region, but to ensure that local businesses have access to business opportunities across the political divide,” says financial analyst, Eliud Okoth.
Granted that a hostile political environment is a hindrance to investments and businesses, the private sector has at numerous times over the years advocated for socially and politically conducive business environments. The call for peace or stability for the sake of investments and businesses, though, is neither an endorsement of a present regime nor a castigation of the opposition.
In 2014, for example, Mr. Shah, while leading the Kenya Private Sector Alliance, had acknowledged that while Kenya was facing a raft of socio-economic changes, there was a need for all political, social and economic players to engage using alternative avenues as opposed to chaotic demonstrations by the opposition and counter demonstrations by pro-government supporters that not only further polarized the country, but put off potential investors. In 2016, KEPSA cautioned that just like many previous elections, the 2017 General Elections would see a slowdown in investments, especially if the political environment turned hostile. “It is just another election but the impact of an election is so important. To the public, it is a time to slowdown,” said Mr. Shah, adding that there was a need for the public and the private sector to ensure that economic stability prevailed. “This was an acknowledgement that businesses bleed the same way regardless of their owners’ social, economic or political affiliation,” says Mr. Okoth. “If there’s low circulation of money in the economy or low consumer power and ability, businesses in Central and Nyanza regions will suffer the same bad fate.”
But this may not have augured well with the Coalition for Reforms and Democracy (CORD), which at the time was holding weekly demonstrations at Nairobi’s Central Business District calling for the removal of the Independent Electoral and Boundaries Commission (IEBC) commissioners.
As predicted by local business leaders, among them Bidco’s Shah, the country faced a serious disruption of economic activities both in the public and private sectors after the 2017 elections. This did not only trouble KEPSA or the business advocacy group, Mkenya Daima Initiative which was chaired by Bidco’s Shah. The Kenya National Chamber of Commerce and Industry (KNCCI) pushed for a quick return to normalcy and an end to disruption of business activities.
Although NASA ‘suspended’ the boycott of products from Bidco and the three other affected companies on May 1 2018, the effects of the boycott political decision were very far-reaching and must never happen again if Kenya is to avoid going the Britain or Venezuelan way. Granted, up until now, questions still linger on the wisdom behind it. For example, how does a business and investment by either KEPSA under Vimal Shah or KNCCI under Kiprono Kittony translate to an undermining of electoral processes? Why should Bidco, which employs Kenyans from varying political persuasions, be subjected to political crucifixion over a matter way beyond its reach based on non-proven allegations?
At a time when the country direly needs investments and more job opportunities, injecting bad politics into the economy is the least that a country like Kenya needs. Despite such setbacks, though, Bidco’s evolution and investments into the economy has not stopped. For example, when it started out over 30 years ago, Bidco was a manufacturing company. Today, not only has it put thousands of Kenyans on pay roll, but also provided thousands of secondary jobs through its edible oils, cooking fats, and detergent products.
Currently, Bidco has been constructing multi-billion factories in Thika through a Sh. 20 billion expansion blueprint that will see the company venture into other manufacturing streams. The fruits of these multi-billion investments are jobs that will see hundreds of jobless Kenyans earning a salary every end month irrespective of their political stand.