The election of Deputy President William Ruto by a narrow margin in a tight presidential race and the split of the electoral commission have set the stage for a Supreme Court challenge that risks prolonging a slowdown in economic activity.
Businesses across sectors have reported reduced activity since the opening of last Tuesday’s vote in an economy plagued with sky-high inflation, scarce jobs and mounting public debt.
Minutes before the chairman of the Independent Electoral and Boundaries Commission (IEBC) Wafula Chebukati announced that Dr Ruto had won the vote, his deputy Juliana Cherera told a separate media briefing that she and three other commissioners had disowned the results.
Analysts reckon that uncertainty over the presidential poll results and a possible contest at the Supreme Court will dampen investors’ activity.
A delay in having a new government looks set to freeze government spending on big projects amid the immediate need to tackle economic woes like rising inflation and policy direction on maize and fuel subsidies.
The stock market, which closed before the announcement of the presidential vote winner, remained unchanged at the close of trading on Monday.
Kenya’s dollar-denominated government bonds fell by as much as 2.9 cents on the dollar, Tradeweb data showed.
“To investors the election is not over given the indications it could end up with a legal challenge. This transmits uncertainty to the economy, which is not good for business,” said Eric Musau, the executive director for Research at the Standard Investment.
Dr Ruto narrowly beat his rival, Raila Odinga, taking 50.5 percent of the vote, with the opposition leader getting 48.8 percent of the vote.
This represents a margin of 1.7 percentage points compared to the 9.6 percentage difference in the 2017 vote.
The announcement was delayed amid scuffles and allegations of vote rigging by Mr Odinga’s campaign.
Four of the seven members of the electoral commission refused to endorse the result, saying it was “opaque”.
“We cannot take ownership of the result that is going to be announced because of the opaque nature of this last phase of the General Election,” said Juliana Cherera, the vice-chairperson of the IEBC.
“We are going to give a comprehensive statement... and again we urge Kenyans to keep calm.”
Mr Odinga’s party agent earlier alleged that there were “irregularities” and “mismanagement” in the election.
Mr Odinga’s running mate Martha Karua yesterday said the contest was not over, signalling a fight at the Supreme Court.
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The political uncertainty is set to affect the economy, especially small businesses that are yet to recover from Covid-19 economic hardships.
The elections have largely been peaceful so far in a country where street protests and clashes usually follow result announcements.
An Uber driver identified as Felix said his daily trips fell from 25 before the polls to eight, a day after the Tuesday vote.
“I withdrew my car because it was no longer making business sense to go out,” he said.
“A lot of Uber guys have taken their vehicles off the streets because business is bad, even in our groups people are complaining that jobs are so low and it doesn’t make sense to remain on the road.”
Felix is just one of the thousands of small businesses that have witnessed reduced demand for their services in the wake of the elections.
Expansion in Kenya’s economic activity has a history of slowing down in election years since the return of multi-party democracy more than 30 years ago.
Analysis of growth trends since 1992 shows the momentum in economic activity has softened 2.83 percent on average in election years and recovered by an average of 2.08 percent in the year after the election fever.
The next President will have to confront an economic and social crisis, where poor Kenyans already reeling from the impact of Covid-19 have been hit by rises in global food and fuel prices.
ALSO READ: IEBC split on presidential results
Inflation is surging and hit a 62-month high in July at 8.3 percent, jobs are scarce and a splurge in public spending by outgoing President Uhuru Kenyatta means that over half the tax take is needed to pay off loans.
At a time when Kenya is dealing with the surge in prices caused by Russia’s invasion of Ukraine, the aftermath of the Covid-19 pandemic and the worst drought in four decades, the presidential candidates had made promises they may struggle to keep.
For the victor, meeting expectations could be the hardest test.
Yesterday, Dr Ruto in his first media briefing after being declared winner said his team had lined up a series of executive orders to “get the country moving.”
He did not offer a direct response when asked how will deal with the soaring inflation.
Dr Ruto had promised interest-free loans, multimillion-shilling stimulus programmes, housing, infrastructure, agricultural reform, completion of stalled projects as well as clearing pending bills while canvasing for the votes.