On October 26, 2017, Kenyan people will go to the polls to elect their new leader in the country’s presidential election. The election result will not only matter to the people of Kenya but to Africa as a whole and the world at large.
Kenya is one of East Africa’s regional economic powerhouses and it’s position as one of the top-ranked countries on the Ease of Doing Business Index and Where to Invest in Africa rankings will certainly be strengthened by the October 26 election if economic forecasts are anything to go by.
Though the upcoming elections are a repeat of the August 8 elections, there is no need for investors to panic, fear or be skeptical as this phase has set a good precedent.
The decision to repeat the elections highlights the independence and separation of the pillars of government in Kenya, in this case, the executive and the judiciary.
Kenya, thus has shown the world that it is guided by the rule of law, a key component of governance which creates a conducive environment for investment.
To date, Kenya has already demonstrated that it is economically on track. The Kenya National Bureau of Statistics Economic Survey of 2017 has shown that the country’s Gross Domestic Product has expanded by 5.8 percent from last year.
This shows the country already has a solid foundation thus a swift economic take off post the 26 October election is very much possible.
Kenya’s solid investment foundation base lies upon its economic production enhancing strategies which make it a favorable investment destination.
For instance, there is the Vision 2030 and the Standard Gauge Partnership Railway Project. Vision 2030 National Development Plan is based on limiting and removing investment limiting barriers, both tariff and non-tariff barriers.
The plan also focuses eliminating corruption. The Standard Gauge Railway Project is a partnership among Kenya, Uganda, and Tanzania aimed at creating a smoother trading relationship among the 3 neighboring countries.
All of Kenya’s economic production enhancing strategies are mostly geared towards manufacturing.
This East Africa’s economic giant is looking beyond it’s natural resource endowment, it’s prioritising human capital, and sound economic governance.
Sanlam Group Investment, a collective group of economists from Kenya states that the new growth models have been implemented after realising that there are higher gains from manufacturing particularly and tertiary sectors in general in comparison to the primary forms of production such as agriculture and mining.
The artificial lull created by the elections present a perfect opportunity for creating capital markets and structured investments in certain sectors.
Sectors such as telecommunications, tourism, banking, construction, and aviation are generally less sensitive to internal occurrences such as elections.
In their election manifestos, both leading presidential candidates, Uhuru Kenyatta and Raila Odinga stated their desire to retain Kenya’s existing economic blueprints.
In a continent that has been dogged by years of policy inconsistency, this is a positive step in the right direction.
This guarantees both the short and long-term future plans for investors who are already operating in Kenya while providing a good example for potential investors that political climate in Kenya does not necessarily affect the economic life.
The International Monetary Fund and the World Bank indicated that Ethiopia has overtaken Kenya as the largest economy in East Africa (Ethiopia has a higher GDP).
However, with all the ingredients in place for attracting both local and foreign investment, Kenya is a country on the rise and has the potential to reclaim its position as the biggest economy in East Africa.
Its biggest assets are the economic production enhancing strategies that will raise returns on investments for both local and foreign investors.