Past studies show that the cost of living shoots up during election years as the economy slows down.
Kenya highest ever inflation rate of 46 per cent was recorded in 1993 just after the 1992 General Election.
Economic growth is also adversely affected by elections.
Kenyans' cost of living shoots up every General Election period as the economy slows to a crawl.
This is according to a study of the country's economic data, which reveals an almost predictable trend where inflation skyrockets while the economy slows down every five years.
For inflation, a wait-and-see attitude adopted by producers of goods and services including the crucial agricultural sector is one of the reasons for the phenomenon.
Farming is usually disrupted by land-related conflict while at other times, there is drought and famine - all of which result in a drop in food production that fuels a spike in inflation.
Kenya highest ever inflation rate of 46 per cent was recorded in 1993 just after the 1992 General Election, when the country first embraced multi-party politics.
The high inflation rate was mainly attributed to the dramatic political reforms as the country shifted to a new political order.
Embracing the new system was accompanied by ethnic clashes in some parts of the country, leading to a fall in agricultural output particularly for basic commodities such as maize.
Production for the key staple declined from 25.4 million bags in 1992 to 24.3 million in 1993.
Out of the five polls held since the dawn of multi-party politics, only for the 1997 election year did the country register a decline in inflation to 6.3 per cent in 1998 from 11.4 per cent in 1997.
Slow economy
Economic growth during that period was also adversely affected.
International Monetary Fund (IMF) data shows that Kenya’s gross domestic product (GDP) shrank for two consecutive years - by 1.08 per cent in 1992 and by another 0.1 per cent in 1993, underlining the economic shocks brought about by the electoral period.
Low consumption and investment also drag down economic growth during these politically charged events.
According to the IMF data, the economy also grew by a mere 0.41 per cent in 1997 and by 2.98 per cent in 1998.
Kibaki effect
In 2002, Kenyans voted overwhelmingly for Mwai Kibaki as president as they banked on his economist credentials to improve the management of the country's resources.
Shortly after the polls, the economy responded by growing by 2.95 per cent in 2003 from 0.48 per cent in the previous year.
The impressive growth, however, did nothing to curb overall inflation which rose sharply from 2.2 per cent in 2002 to six per cent in 2003.
After the magic of his first term, the economy witnessed depressed performance in the aftermath of the highly disputed 2007 General Election.
Inflation rose astronomically from 4.3 per cent in 2007 to 15.1 per cent in 2008.
The depressed performance during 2008-09 was due to a combination of a number of adverse shocks including post-election violence, a severe drought that hit many parts of the country, high international commodity prices and the spill-over effects of the global financial crisis.
Enter Uhuru
With Kibaki out of active politics, the 2013 General Election in which President Uhuru Kenyatta was declared the winner with 50.5 per cent of the votes was also characterised by a uptick in the inflation rate from 5.7 per cent in 2013 to 6.9 per cent in 2014.
According to the Economic Survey 2014, the challenges that dented growth included lower business confidence due to the polls, incidents of insecurity, and insufficient rains during the fourth quarter of 2013.
Come April and May this year as the elections drew closer, Kenyans were concerned with the overall spike in the prices of basic commodities such as maize flour, with inflation hitting a high of 11.7 in May.
Kenya’s inflation stands at an average of 9.78 for the last six months, which is also a period preceding the General Election on August 8.
During the period before and after this year's polls, the trend was again as the years before: the economy slowed down as was the case in 1992, 1997, 2002, 2008, 2012 as well as the first quarter of this year.
“When the economy slows down, inflation and unemployment usually rise,” said Carole Kariuki, CEO of the Kenya Private Sector Alliance (Kepsa), in a past interview.
Former World Bank Kenya chief economist Wolfgang Fengler writes on his blog that General Election years also have other factors affecting growth including natural disasters such floods and droughts:
“Why is Kenya’s growth performance substantially lower during election years? Low growth during election years and thereafter was not always driven by disruptive elections. In several cases, electoral instability was compounded by natural disasters, such as the 1983 and 1992 droughts, or the 1997/98 El Nino floods.”
Dr Fengler also points at the time of elections as causing shock to the economy.
“However, the conduct of several elections has shocked the economy — often hard enough to affect development prospects beyond the election year. After the 2008 post-election violence farmers were unable to plant, tourists re-routed their vacations to other destinations, companies held back their investments, and households reduced their consumption,” he says.
Prior to the 2013 General Election, the World Bank had in a report noted the slow nature of the economy around times of polls.
“On the domestic scene, election years in the past have been problematic for Kenya’s growth as investors have held back, waiting to see the outcome and whether there would be a peaceful transition.
Over the last 30 years, election years have been associated with a one percentage point lower growth rate than the long-term average,” said the World Bank in the Kenya Economic Update report of December 2011.
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Note: The results are not exact but very close to the actual.
