The clear absence of moral principles in our politics has meant that every election year is welcomed with fear and worry by Kenyans due to expectation of violence of some kind.Already,with the election just six months away,the deadly retaliatory attacks in the Tana Delta and earlier violent protests in Mombasa have Kenyans deeply concerned.Are they an indicator of a repeat of the deadly election chaos we experienced five years ago?
As we deliberate on that maybe it would be of the essence to also ponder on what a repeat of the violence would mean to the economy.Now that we have the benefit of Hindsight,a look at the cost the election violence had on the Kenyan economy might help us picture what a repeat of the violence would cost us as a country.
To begin with impressive improvements in infrastructure plus recent discoveries in oil and natural gas means we are better positioned to attract FDI. A recent report by the Business daily indicates the same to be projected to be to the tune of $1.3 billion from 2013 through to 2018 according to Stanbic Investment Management Services.However,this calls for political stability seeing 2013 is an election year and political instability being one of the deal breakers when it comes to FDI in Kenya. Picture this,in 2007 FDI was at $729m and dropped almost 75% to $183m in 2008 after the election violence.Do we really need a recurrence of this? With Unemployment standing at 40% we should protect FDI,through our conduct during elections, considering the job opportunities that stand to be created in growth of investment in agriculture and manufacturing.
Albeit on it’s path to full recovery after the 2007/08 election violence,an investment climate statement on kenya by the Bureau of Economic,Energy and Business affairs places an asset loss of $3oo million to the Agricultural sector due to the destruction of farm and dairy machinery.The cost to the government and ultimately the Tax payer could be much higher considering the incentives extended to farmers by the government.
Tourism,one of our highest foreign exchange earners,has already experienced a 0.5% decline in visits in the first quarter of this year which is directly attributed to the brief insecurity that rocked Lamu.A look at 2007/08 data goes farther a long way to show just how this sector is sensitive to instability of any manner.A loss of KES 9.42billion in earnings was experienced in the first quarter of 2008 or a 54% decline in earnings compared to the same period in 2007.The total loss to the economy,from tourism earnings, during that year due to elections was placed at KES 10.54 billion.If we are to get anywhere near the record KES 98 billion in earnings achieved in 2011 avoiding a resurgence of violence is important.Otherwise after march 2013 we’ll be more focused on regaining the confidence of tourists than improving on past earnings like was the case after the last general election.Which costs an arm and leg.
Our country’s strategic location also means the Mombasa port gets the enviable opportunity to handle cargo for landlocked countries like Burundi,Congo,Rwanda with Uganda providing us with the most business.More recently we have South Sudan joining the list.Stability for ease of transport of cargo therefore automatically becomes our top priority.However,since the last violent election,this position is no longer assured with Uganda who were adversely affected reported to be actively looking for alternative routes for their cargo, inefficiency at the port being another trigger.Considering Uganda exports account for 80% of the Export volumes handled at the Mombasa port,subsequent disruptions of trade due to election violence would mean future Loss of the Ugandan business and meaningful revenue for Kenya that would run into billions.
The Uganda revenue Authority is also reported to have lost KES 50 million in daily revenue collections during our election mayhem which doesn’t seem to be that much compared to the KES 2 billion in Daily collections the Kenya Revenue Authority is said to have lost during that period.This alone should make the KRA Commissioner-General John Njiriani a worried man as the election date approaches considering their ambitious targets for the financial year 2012/2013 which is set at Ksh 890 billion.
A quick estimation based on the figures provided and the current performance of our economy would then place the loss due to another Post election violence at well over $ 1 billion.As one person once put it -African elections are one heavily funded ethnic contest.Seeing that most end up in violence could we also say they are one costly ethnic contest to the citizen?