Kenya: The Days After

According to most of the international media there is a significant probability that tomorrow's presidential, parliamentary and county-level elections will lead to a re-run of the major violence seen after the 2007 vote. This stance partly reflects the fact that the two main parties. Jubilee and NASA, are neck and neck in the polls alongside repeated claims by the NASA leader Raila Odinga, who has contested the last two elections, that only another bout of ballot rigging can deny him a long overdue and deserved presidential victory. The recent murder of a key electoral official has also exacerbated concerns.

However, the domestic media and financial markets seem much more sanguine. Despite some intermittent volatility, the Kenyan shilling has been broadly flat against the USD over since the start of the year while the Nairobi All-Share index is up by 4% and over 18% so far in 2017. This partly reflects the preparedness of the security forces to quell any outbreaks of disorder as well as the pledges from the main parties to refrain from incitement. Of course, both assets could tumble sharply in the event of marked post-vote turbulence.

Despite a lot of posturing, there is little to fundamentally separate the main two parties in economic terms. Consequently, despite any post-vote friction, there are no signs that a NASA victory poses a threat to key pieces of investment-relevant legislation. These include an amendment to the 2013 Public-Private Partnerships Act which will give counties the ability to arrange PPPs, an Energy Bill which will be extended to cover renewable sources, and the introduction of road tolling to help fund the upgrading and extension of the network.