Citigroup (CITI)
- Limited impact on economy if the political crisis is resolved. It Matters little to the economy who won the election as private sector will continue to drive growth
- Share sell off at NSE could be a good buying opportunity as economic fundamentals unchanged.
- President will use police and military to clamp down on protests which themselves will not last more than a few weeks
- Parliament loyalties will be split by president as MP’s vote with their stomach
- There’s little the international community can do besides pushing for reforms.
- Also in the pre-election period, the opposition may have been falsely buoyed by opinion polls which are not sound (& could the same thing have happened to Obama in New Hampshire ?)
Renaissance Capital (RENCAP)
- Crime wave has emerged under the guise of political riots
- Government may take all 12 nominated seats in parliament
- Reemergence of the civil society and NGO’s as source of political pressure and search for solutions.
- Main threat is if two parties don’t agree so may revise down the 6 – 7% GDP projections.
- Also prices have not factored in the chaos, so investors should hold off on buying.
Thanks to Silaha for the 2 reports – and who has also blogged some post-election predictions for Kenya
Treasury Officals:– from Business Daily
- Damage on the economy could cut the projected growth by as much as a half, if not worse as agricultural, financial services and tourism sectors are likely to under perform
- Treasury could be forced to craft a stimulus economic package to help reconstruct the affected regions and
- Lower the interest rates in the economy.
Central Bank Governor – from Reuters
- Kenya can still achieve 8% growth in 2008
- Disruptions were temporary and will have a major impact on GDP growth
- Shilling’s depreciation was due to holiday period
- Safaricom IPO in the first quarter of 2008
- Interest rates will not change
World Bank
(Hat tip Kumekucha) There’s a controversy brewing of the World Bank’s assessment of the election and resultant crisis
Excerpts;
- The considered view of the UN is that the ECK announcement of a Kibaki win is correct. More irregularities of consequence on the Odinga side than on the Kibaki side.
- The process of arriving at the result created a crisis of confidence due to missteps by (a) the ECK chair (who joked about possible rigging during a news conference), (b) the vocal EU observer who was not thorough and precise in analyzing information provided to him (c) the lack of preparation by Kibaki’s party in dealing with a highly media-savvy opposition.
- Moving forward. One option being explored is getting them to agree to a recount which, by law, has to be done through a petition to Kenya’s High Court. Eminent persons from abroad would monitor this recount. Meanwhile, Kibaki would proceed to form a Cabinet, possibly with some participation by Odinga supporters. It is unclear what would happen if the exercise arrived at a different result from the ECK decision. The gamble is that this would not happen and that even if it did, both sides would have a face-saving way to accept a change in course via-a-vis their supporters
This is not the first time the first time that the land-lord-tenancy arrangement between the President and the World Bank has been put to question – see here and here
Finally, not sure if she’s a banker, but Kenyanentreprenur argues that what Africa needs are development minded dictators since we are not ready for democracy – and I hope we won’t be having this debate in 2012!
My own take is that the people at the Coast, Nyanza, Rift Valley and Western provinces need to start rebuilding their lives and their industries – otherwise they will be left behind. Rioting in your own community is dumb as you destroy businesses that deliver services and create jobs within the community. So pass that message along with any peace & sympathy messages you convey. Also watch NTV’s great Voices of Reason program on Youtube that looks at pre- and post-election issues (more on that later).