Business owners have no confidence in IEBC talks

Corporate News

IEBC chairman Ahmed Issack Hassan. PHOTO | FILE 

By JAMES KARIUKI

In Summary

• “Some survey respondents pointed to escalating political unrest as a contributing factor to the slowdown in the pace of growth in activity,” said Jibran Qureishi, the regional economist for East Africa at CFC Stanbic, in an earlier report.

A majority of executives and business owners have no confidence in the ongoing talks to resolve the dispute over the electoral commission, warning that the stalemate is hurting private sector growth.

A survey conducted for the Kenya Private Sector Alliance (Kepsa) revealed that only 39 per cent of the respondents were confident that the stalemate at the Independent Electoral and Boundaries Commission (IEBC) will be resolved.

About 34 per cent of those interviewed reckon that the talks will lead to nothing while 27 per cent are unsure of the outcome. Opposition CORD, which suspended protests over the IEBC, formed a parliamentary team with the ruling Jubilee grouping to resolve the dispute over the election oversight body before the scheduled August 2017 polls.

READ: IEBC chiefs refuse to answer House queries

IEBC commissioners are opposed to talks that could lead to their exit, arguing that it would be unconstitutional.

“There is a high likelihood that the politics is affecting various economic variables,” said the survey conducted by Trends and Insights for Africa (Tifa).

The survey was conducted between July 21 and 23 and interviewed 509 people from Nairobi’s city centre including 13 industry association heads. The results are in tandem with a recent survey conducted by CFC Stanbic which shows that private sector activity in June expanded at the slowest pace since January 2014, with output nearly standing still amid a slowdown in hiring and purchasing.

Escalating political unrest

The Markit CFC Stanbic Kenya Purchasing Managers’ Index (PMI) dropped to 51.5 last month from 54.0 in May, close to the 50 mark that divides growth from contraction.

“Some survey respondents pointed to escalating political unrest as a contributing factor to the slowdown in the pace of growth in activity,” said Jibran Qureishi, the regional economist for East Africa at CFC Stanbic, in an earlier report.

Several people were killed and others shot when weekly protests called by the opposition CORD coalition to press for the sacking of IEBC commissioners turned violent.

Demonstrations flared up in late April, but CORD suspended its action after the ruling Jubilee coalition agreed to talks to resolve the dispute.

Businesses lost more than Sh120 million during demos including boda boda operators, who incurred losses of Sh5,000, and newspaper vendors, who reported losing Sh10,000 each day.

Banks and other financial institutions lost an average of Sh166,727 on each of the five days that the protests were held, amounting to a total loss of Sh833,635 for each bank.