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Opinion & Analysis

Political impasse choking the economy

A political rally. All sectors of the economy are experiencing a lull, owing to election jitters. FILE PHOTO | NMG
A political rally. All sectors of the economy are experiencing a lull, owing to election jitters. FILE PHOTO | NMG  

Associations and lobby groups representing elite businesses have lately been at the forefront preaching peace and warning that the prolonged electioneering period and political crisis are hurting businesses.

The Kenya Private Sector Alliance, the Kenya Association of Manufacturers and the Federation of Kenya Employers have all voiced concerns and called for negotiations between the leading political players to end the stalemate.

You may question the lobbying tactics of these elite business association, I don’t know whether they still command the position and prestige of non-partisan entities with enough wherewithal to broker and negotiate peace between our wrangling political elites.

What there is no doubt about is that they are right when they say that formal businesses are hurting. Much of what these lobby groups say reflect the predicament of their members.

Yet I still think that the silent majority, informal sector and small businesses who do not belong to some of these elite lobby groups and therefore- don’t have avenues to vent their tribulations, have suffered much more than the formal businesses from the prevailing political environment.

Do we pause to ponder the impact of these protracted street demonstrations on the informal and other non-wage sectors?

This is where the majority of workers are employed. Most of the workers travelling to work by matatu or buses to Nairobi in the morning are hair-stylists, fitness instructors, disco bouncers, day watchmen, and employees of car-washing outlets.

The majority of workers in Nairobi and other towns are motor vehicle mechanics, staff employed at M-Pesa outlets, employees of call- centres, mobile telephone repair shops and small shops offering photocopying and document binding services. Indeed, M-Pesa shops and car-washing businesses have sprouted in every corner of the capital city.

If you want to see the fundamental changes happening in employment patterns in our urban areas, start by observing what is happening to the traditional dukawallah shop in Nairobi’s central business district.

The formerly ubiquitous Indian dukawallah shops have almost disappeared and been supplanted by 10 by 10 feet kiosks, most of them selling uncustomed clothes, footwear, mobile phones accessories and refurbished computers imported from Turkey, Thailand and Dubai.

Literally every other town in this country has a “Garissa Lodge” jargon for shops selling uncustomed goods, the majority of which are imported through Kismayu or Eldoret International Airport and eventually find their way to Nairobi’s Eastleigh estate.

The point, therefore, is this. The elite, most of them members of small but dwindling labour aristocracy that earns a salary and attractive medical insurance, are not in a position to appreciate the depths of disruption and human suffering that happen when we have prolonged political uncertainty in this country. The silent majority don’t have safety nets.

Consider the predicament of the hawker who ekes a living from hopping from one bar to another in Nairobi’s Eastlands, his only stock of capital- a handful of second-hand suits, sports shoes and fake Chinese Hi-Fi equipment. How can he survive the impact of prolonged street demonstrations?

We need to get over the period of uncertainty on the elections as quickly as possible so that we can start addressing the serious economic problems we face.

Our leaders persist in the celebratory talk about robust growth of the economy- about green shoots of economy- and about stable macro-economic conditions.

Yet the evidence out there clearly shows that we have deep rooted problems and contradictions in our economy. The Kenya Revenue Authority is not meeting targets set by the Treasury.

We have witnessed an upsurge of listed companies that are reporting dwindling profits if not losses. We are seeing widespread distress among leading supermarkets- with Nakumatt, the largest, facing major problems with debtors.

While the government touts an exponential increase in the number of electricity connections, statistics from published audited accounts of Kenya Power show that this growth in connections has not come with an increase in electricity consumption by households nor industrial consumers.

Pick up of credit by the private sector is at a historically low point. Too many of our banks are in financial problems with a number of banks operating below minimum capital requirements, below regulatory liquidity requirements, and hold unsustainable non-performing loans on the increase. We just can’t afford all these protracted political disputes.

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