Why Kenyan CEOs Are Less Worried About Elections

File image of KEPSA CEO Caroline Kariuki during a past presser. PHOTO | COURTESY By Kepha Muiruri

Kenyan Chief Executive Officers (CEOs) are less jittery about the staging of the much-anticipated General Election next week.

This according to a new survey by the Kenya Private Sector Alliance (KEPSA) in collaboration with TIFA which incorporated feedback from 173 business leaders from medium and large businesses.

According to the survey conducted between July 4 and July 25, the CEOs’ optimism measured by the Business Confidence Index had a count of 61 index points, the highest in the previous two general elections.

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In contrast, business confidence as measured by the business confidence index was measured at 53.8 and 44 points respectively.

KEPSA CEO Caroline Kariuki says increased political stability has yielded the higher levels of business confidence through the upcoming August 9 General Election.

“We are maturing as a democracy. Despite the election being an event, people have realized that this event will come and go. Before, three months to the elections, you would feel the tension in the air, you didn’t have to be told,” she said.

Secondly, the whole idea of having the Supreme Court has given us confidence that if there was a dispute, there is a place for it. Before, this could be why there was a lot of anxiety.”

On average, CEOs see an improvement in economic conditions across all industries in the next six months compared to their levels of optimism six months ago.

The higher levels of optimism are on the backdrop of disruptions and shocks arising from the Russia-Ukraine conflict including supply chain disruptions and high commodity prices.

Nevertheless, the CEOs note headwinds to optimism including the high cost of production, inflation, rising petroleum prices, change in government and hopelessness in economic conditions getting better.

According to Ms Kariuki, businesses are usually highly sensitive to uncertainty with less jitters implying little to no general disruption to commercial activities.

“Business is very sensitive to tension and reacts to it very fast,” she stated.

Finding from the KEPSA/TIFA survey align with the conclusion of an earlier market perception survey by the Central Bank of Kenya (CBK).

According to the survey released on Thursday last week, optimism about the country’s economic prospects in the next 12 months are greater this year compared to the run-in to the 2017 elections.

“This in effect shows how people are proceeding with making economic conditions. Last time, there was a lot of wait-and-see attitudes. This time, we haven’t had much of this wait and see attitude, the economy is still going on despite what many had thought would be problematic. I think this is a phenomenal outcome,” stated CBK Governor Dr. Patrick Njoroge.