Businesses monitoring risks from elections

With just a week to go, there is well-founded optimism among the business community that the elections will be peaceful.

However, this has been tempered with a healthy dose of caution.

Although Kenya’s democracy has matured over the past decade, there are still some critical gaps that pose risks to businesses.

CAMPAIGN FINANCE

The opacity of campaign financing remains a key cause of concern.

It not only undermines accountability, but also encourages corruption and cronyism, which are detrimental to business.

We have witnessed high-level funding of political campaigns to the tune of hundreds of millions of shillings by anonymous financiers.

FAVOURS

Their objective is to influence future procurement and legislative decisions for their own gain.

When business opportunities are handed out on the basis of such contributions rather than competitive pricing, you do not create an entrepreneurial class but a kleptocracy.

This poses significant risks for honest businesses.

TRANSPARENT

We must in future not only make campaign contributions more transparent, but also enforce spending caps.

Another factor that heightens the risk in the elections is the large pool of unemployed youth.

According to a recent World Bank report, unemployment among Kenya’s youth is the highest in the region at 17.3 per cent compared to six per cent for Uganda and Tanzania.

UNEMPLOYMENT

Idle youth are vulnerable to incitement. We need to create sustainable jobs for youth.

This can only be done if the poll is peaceful and the post-election environment conducive for businesses to grow and create jobs.

Our institutions are still relatively weak.

Granted, there has been some improvement, thanks to constitutional reforms.

INVESTORS

However, more can still be done. Our political parties, for instance, are fluid tribal groupings that politicise ethnicity and merely serve as vehicles to power.

In mature democracies, parties are strong institutions with consistent positions on economic issues such as fiscal policy, debt and trade.

When economic policy is more predictable, it becomes easier to attract long-term investors in capital intensive sectors such as manufacturing.

TOURISM

In the long run, we need to work on campaign spending, unemployment and strengthening institutions to reduce electoral risks.

However, the immediate concern is ensuring free, fair and peaceful elections.

The economy, despite facing turbulence due to global shocks and drought earlier in the year, is on a good trajectory.

Tourism is recovering, infrastructure has improved; and the country is deemed the second most attractive investment destination in Africa after Morocco, according to a recent report by global consultancy EY.

MOMBASA PORT

All these gains could be negated in a flash if we do not safeguard peace.

As the commercial gateway to East Africa, Kenya’s peace and stability directly benefits landlocked neighbours Uganda and Rwanda, which depend on Mombasa Port and inland transport infrastructure for trade.

TERRORISM

Kenya is also a key player in the war against terror and has played n key role in weakening Al-Shabaab’s influence in the region.

Our role in the Intergovernmental Authority on Development (Igad) has helped to expedite the peace process in South Sudan.

Peace in the elections is as important to Kenya as it is to the region.

It is no surprise that the business community is closely monitoring risks ahead of the poll.

I wish to not only reiterate our commitment to peace, but also to invite the business community and all people of goodwill to be ambassadors of peace during this election period.

Mr Kittony is the national chairman of the Kenya National Chamber of Commerce and Industry. [email protected]