Trade Tourism Source: Government of Kenya Economic Survey (2007) Figure 2.6:Value ofKenya’s Exports Burundi, Congo,Rwanda, SouthSudanandUganda experienced bytransittransportersfromandtoland-locked countriesof suffered serioussetbackduetotheviolence.Notmentionlosses cereals) dependonintensive labour, road,airandseatransport,allofwhich 2.6). ItshouldbenotedthatmostofKenyaÊs exports (tea,coffee, meatand beverages, consumergoodsandlubricantsbeingthekey exports (Figure years; itisstilldominantlyanexporter ofagriculturalgoodswithfoodand KenyaÊs compositionofexports hasremainedbroadlythesameover the the importbillin2008comparedwith48.1percent2005(G0K,2008). election violence.Earningsfromtotalexports financed 45.4percentof in 2006mainlyduetoadeclinere-exports andtheeffects ofthepost- value ofexports significantly declinedto8.7percentfrom31.0 (Figure 2.6).Exportsgrew byabout8.6in2007.In2008,growth inthe Over theperiod2003to2008,value ofexports was onanupward trend handling theMRC challengeandrhetoricfromthe politicians. over thelast threeyearsandtheirworries onthe way thegovernment is sector hasdemonstratedthecapacity torecover quickly, ithasstruggled they hadtodealwithpost-election violenceof2007/2008. Although the global financial crisisof2006thatwas slowly moving intoEurope,when deals majorlywithforeignbusiness networks was stilldealingwiththe does notreflecttheactuallylosses.Inaddition,tourismsector which Eldoret, Nakuru,Naivasha, Narok,KitaleandKisumu. The dataavailable had alreadyexperienced majordisruptionsinthe conflict citiesof their annualearnings. This situationalsohitthematatuindustrywhich that many tourandtaxitransportationexperienced lossesofover 70%of in thetourismchainwas hardesthitincludinglocaltourism. This meant overall (Kenya Tourism Association, 2009). The generalnegative impact KenyaÊs roadtransport. This ledtolow occupancy ratesof20%and 40% Malindi oftouristswhohadbeenkidnappedin2006,andthebad state of The Tourism sectorhadnotrecovered fromthenegative publicityin geographical regions andhasnotbeenrecordedbythegovernment. important tonotethattheimpactofcrisishasbeendifferential across report 2010)withcasualinformallabourtobethehardesthitby2011.Itis in manufacturing andagriculture(Kenya Association of manufacturers- Manufacturers (KAM)analysisestimates atemporarylossof400,000jobs approximately 120,000joblossesintourism,andKenya Association of issued travel advisoriescitinginsecurityinthecountry. Inaddition, perceived, tothe extent thatsometouristsourcecountries(USAandUK) Tourism suffered fromnegative publicityoninsecurity, bothrealand the growth ofothersectors (i.e.transportation,food,andentertainment). marketing budget inthetourismsector. The sectoralsocontributes to poor transportinfrastructure,policy andlegal weaknesses,andlimited from post-electionviolencedeclineingrowth. Itwas alsoattributed to from 98in2007. This was attributed mostlytothenegative publicity earnings totaledKshs.65.4billion.Kenya was ranked 101in2008down Tourism received 1.8millioninternationalvisitors byendof2007,and Region nya’s 2012-2013General Electionsonthe The DynamicsandAnticipated ImpactofKe- EAC-Membershipnowinclude Congo,Burundi,RwandaandSouthSudan 4 Suguta Valley isinBaragoiamarkettownKenya,northofMaralaland east 3 two thirdsrule,theSuguta Valley massacre, and lackofseriousattentiontoaddresstheconstitutionalprovision ofthe The intentiontochangetheconstitutionalprovisions tosuitparliamentarians market analysts,couldeasilyattractviolence(Delloitte,2012) anxiety anduncertaintythanin2007/2008,thissituationaccordingto Presidential electionswillbeheldinanenvironment heavy withreal the confusionandmistakes madein2007/2008.However, KenyaÊs next been implementedtocreatechecksandbalancesthatwould helpavoid with over justover I/2oftheprovisions ofKenya constitution2010having next presidentialandgeneralelectionstakes inadifferent environment; negatively andindustry, economistsandKenyans, areanticipatingthatthe It isevident thattheelectionviolenceimpactsbusiness andtheeconomy in Darfur, BlueNile,andSouthKordofan. push forareductionofviolenceinandpermanentsolutionstotheconflicts Khartoum regime. The new government aftertheelectionswillalsoneedto a regional context. Kenya attemptstoavoid directlyantagonizingthe their postseparationnegotiations andbilateralrelationsare situatedwithin Community. The two Sudanesecountriesdonotexist inavacuum; rather, this aswellaconsiderablenumberofstateswithintheEast African The caseofUgandaduringthe2007postelectionsviolencepoint to elections willnegatively impacttheireconomies. function. Any stabilityorinstabilitybefore,duringandafterthecoming air, andwater transportationnetwork, health,bankingandtradeservices larger EAC have economicinterestsrelyingheavily onKenyaÊs road, the SouthSudan.MostofcountriesneighbouringKenya withinthe countries aswellseveral othergovernance assistances,particularlyto transportation, humanresource,technicalskills,andlinkstoforeign vital fortheentireSudanÊs economicdevelopment, asKenya provides example, thestabilityofKenya afterthe2012-2013electionswillbe region4 stemfromthedependency ofalllandlocked neighbours.For Understandably, thepracticalconcernsfromexpanded East African particularly stronginterestintheSouthSudan. on Development (IGAD)peaceprocessthatyieldedtheCPA, Kenya hasa Nairobi. Above all,having ledtheregional Intergovernmental Authority demolition ofKenya-Uganda railway lineinKiberaKenyaÊs cityof The strategic importanceofKenya intheregion was demonstratedbythe Eldoret aredifficulties thatareboundtonegatively impacttheeconomy. as totheroleofasectionUgandaÊs armyinanhospitalexplosion in misunderstanding withEthiopiaandherunresolved 2008questions in Somaliatogetridoftheal-shaababterrorgroup,herboarder Sudan andSomaliarespectively. However, KenyaÊs militaryintervention at fromitscontribution topeacefulreferendumsandelectionsinSouth Furthermore, KenyaÊs influenceintheEast African region isoftenlooked and investors andultimatelyfortheeconomy. negative pointerstoperceived conflictsandcourseforalarmbusinesses participation processfortheirpartymembership. All theseconcernsare lack ofclarityandinstitutionalizationPoliticalParties forfair election existence ofIDPs,theICCprocess,Churchbombingsandinsecurity, provide pointersforconcernanduncertainty. Inaddition,thecontinued and lackofleadershipatEACC andNationalcohesionCommission,also Turkana tribes has apopulationofnearly20,000comprising mostlypeoplefromtheSamburuand of theSuguta Valley. ItispartoftheSamburu District. The entireBaragoidivision 3 controversial policereforms,

56 Elections Dispatch No.6 No.6 Dispatch Elections

Elections Dispatch No.6 Regionalize politicstogetaway from Tribal alliances • Undertake civic educationforpoliticalpartiestoinstitutionalize • Institutionalizepeacebuilding aspartofthemeasurableoutputs, • Asecuresub-region isvitalforeconomicgrowth andinthisregard • Provision orcreationofaConflict/violenceinsuranceproductto • TheExport orientedcropsshouldadoptdiversification ofexport • Morespecifically atpolicy level theKenyan government andits • Thecorporatesectorneedstopartnerwithcivil societyand • Fundamentally, national,regional andinternationalinstitutions • Recommendations andConclusions devoid ofpoliticalmanipulations. laws underthenew constitutionarefollowed andimplementationis in ordertocreateawareness amongstthelocalcitizensandensure the civil societyandtheprivate sectortolobbyforapositive course There isnodoubtthatthereaneedforconcertedefforts fromboth widespread corruptionandimpunitystillwellentrenched. ethnicity continuestobeprioritizedinthepoliticaldomainwith meaningful socio-economicprogressasnumbersindicate,however, politics. Inthisrespect,sincethechaosof2007/8therehasbeensome been attemptsattransformingthestatetowards goodgovernance and remain andrequireurgent remedialactionstobetreated. There have The demonsandwounds thatthe2007-2008post-electionviolencestill standards ofastructurepoliticalparty governance structuresandhave clearandminimumrequired to usefinancial criteriacontainedintheCRAformula. and mandateofCounties,sub-countiesconstituenciesinorder few months. and SouthSudanwhichhastake-up KenyaÊs attentioninthe last creating ateamandquellingtheanimositybetweennew Sudan the importanceofitsrecognitioncannotbeignoredespeciallyin the weightof AU –aninstinctively pro-unityinstitution–and to protecttheregionÊs economiesandmarkets; create someguaranteesfora„secureandsafe‰regional framework stabilize theflower sub-sector. The EAC –IGADsummitsneed income; channels inordertoprovide someprotectionagainst lossof EAC counterparts to: companies aretryingthisapproachinNigeria. has beensuccessfulinSouth America conflictareas,andOil corporate socialresponsibilityandethicsprograms.Coca-Cola communities tocreatelastpeacebuilding communitiesunderthe and instituteacompetitive, fair andcredibleelectionprocess. elections aswellkeeping thepoliticalleaderstorespectlaw achieve thedesiredresults. These willincludepursuingpeaceful (EAC, IGAD, AU, AID, etc) need tocombineefforts tohelp Ramco Printing Works Ltd Nsamba AdamMorris Design &Printing Project Coordinator

Hse No.305,Mountain View EstateOff Waiyaki Way Politics inKenya,‰ in A. Ghirmaizon(ed.) Heinrich BollFoundation, (2006).„Challengesfor Transitional NORMD. Nairobi; HCDA. Flower ExportsduringtheViolence: aQuantitative Assessment” HCDA, (2006).Horticultural Govt Printer. Nairobi MinistryofPlanning,CentralBureauStatisticsNairobi. Government ofKenya (GOK)(2003). Nairobi MinistryofPlanning,CentralBureauStatisticsNairobi. Government ofKenya (GOK)(2007). Nairobi, MinistryofPlanning,CentralBureauStatisticsNairobi. „Nairobi; KAM. KAM, (2010)„ of PeaceintheIGADRegion Government ofKenya (GOK)(2011). Nairobi 214 countriesfrom1960to2011 Washington DC: World Bank. World Development Indicators(WDI)(2011). World Databankcovering Washington DC.WB. Program: Adjustments andprogress World BankPartnershipStrategy. World Bank(2011). World Development Report2010:KenyaReform Econometrica, The EconometricSociety Vol. 70,No.3(May)pp.883-905. Torsten, (2002).“DoPoliticalInstitutionsShapeEconomicPolicy?” in East Africa, Report, April, Mombasa annual meetingofthe African Association of Association ofProfessionals Sichange, A. (2011).„Trade Facilitation inEast Africa‰ ,paperreadtothe Proceedings of Aljazeera MediaReport Obala, M.L.(2012 Economic Transformation. NyongÊo A.P. (2007). Oxford University press. Getzel, C.(2000). review, Delloitte (2012) (NORDEM). Oslo, University ofOslo,Norwegian CentreforHumanRights, Conference Thedisputed2007Kenyangeneralelectionincontext, acted underalotofpressure‰ Andreassen, T. Barasa, T. Kibua and Tostensen, A. (2008), A„I Post-election Violence ontheKenyan Ksoll C.,Machiavelli R.,Morjaria A. (2009), African ResearchResourceForum (ARRF) Cell: +254731210780 /+254728606619 Tel/Fax: +254020 3002721/8330457 P.O. Box57103-00200Nairobi Nairobi:Delloitte. : East Africa PublishingHouse Email: [email protected] Website:www.arrforum.org Challenges ofElectionViolence onManufacturing: Contacts References Kenya: EconomicOutlook2011, DelloitteBudget ). “ The PoliticsofIndependentKenya, The 2012-2013Kenyan PresidentialElections A LeapintotheFuture: A Vision forKenya’s Socio- Nairobi: ARRF Press. Nairobi: ARRF Crop Development Authority “Kenyan (Nairobi: HeinrichBollFoundation. Proceedings of Annual NORDEM Flower ExportIndustry . Mecca:CenterforStudiesMecca Economic Survey2003, Economic Survey2007, Economic Survey2011 The ImpactoftheKenyan In QuestforaCulture . Oxford: 1963 68 ”, , .

AFRICAN RESEARCH AND RESOURCE FORUM (ARRF) Introduction A

cent in2009/10risingto6.3per2011/12. The plummeting growth fromalow of1.7percentin2008to2.0and3.1 variables over 2009/10-2011/12thatincludesrecovery ofeconomic activities, creatingemployment, byaddressingkey macroeconomic and improving infrastructure,expanding irrigationandconservation recession andenhancingtheircompetitiveness byreducingenergy costs cushioning industrieshardhitbytheviolenceand2008/2009global growth thatincludedboosting demandfortheproductsoffarmers, Consequently, thegovernment quicklyintervened toaddressdeclining 2009/2010) pointingtotheelectionviolenceof2008. with decliningrevenues of456Billionin2009(KRA,Financialreport 2009 whileunderlyinginflationroseabove the5%target toreach9% high inflation,withheadlineinflationreaching25.8percentinMarch growth of7.1%in2007to 1.7percentin2008was compoundedby violence indicatingapossibleevidence ofrecurrence.KenyaÊs declining at $729manddroppedalmost75%to$183min2008aftertheelection major variable inattracting and growing investments. In2007, FDIwas indicates thatthenatureofgrowth, morespecifically, politicalstabilitya 2011) betoapproximatelyover $1.3billionfrom2013throughto2018 and improve theinvestment climate.ItisprojectedEconomysurvey, in oilandnaturalgasmeanswearebetterpositionedtoattractFDI institutionalization sincethe2003.NARC indicative recentdiscoveries Kenya hasmadeimpressive improvements ininfrastructureandpolicy economic analysis(Torsten 2002)ratherthanpoliticaleconomy. higher investments notingthatthefocusofthispaperispolitical environment, andincreasedcredittotheprivate sectoraswell inflationary pressure,low interestrates,stablemacroeconomic sectors was influencedbyimproved weatherconditions,low manufacturing andfinancial intermediation. The growth inthese and forestry, wholesaleandretailtrade,transportcommunication, magnitudes. The mainsectorsdriving theeconomywereagriculture that allsectorsoftheeconomyrecordedpositive growths ofvarying of 2.6%in2009andarealGDP7.12007.Italsoshows 1 T produce anddistributegoodsservices process inputsandoutputshowasocietyusesitsresourcesto Economy: A Total sumofacounty’s resourcesusedintheproduction government, civil society, development into and informs the electoral and political process by providing practical and easysolutions to makers policy in which disseminated is in soft debated meeting, at areview asto so ensure quality. Th the and academia, society civil government. Each by output six diff of peerreviewed the project is ofaspects the electoral and political process. Analysis undertaken is by ateam of analysts of comprised individuals from Real GDPexpanded by5.6%in2010,comparedtoagrowth n analysisofKenyaÊs economyin2010/2011reveals that the legal political framework, processes aswell management. of aspractice elections It off his contributes project management elections to peaceful and state stability in Kenya, by refl The ImpactofElection(2007/2008) Violence onKenya’s Elections Dispatch and hardcopy. Th Economy Kenya ElectionsProject partners, and partners, the general public. Dr. KitiReginahM.KKitiabi(PhD) ISSN 2012-2006 e Elections Dispatch apractical oriented policy eElections is publication. It feeds 1 : LessonsLearned? Supported by e project regularly eproject publishes its outputs Dispatch, asElections unequal afterSouth Africa andNigeria in termsofwealthdisparities.Of AfricaÊs 54states,itisthethirdmost incidence. Kenya isratedthe10thmostunequalcountryinworld (WDI, 2010). This measurereflectsthedepthofpoverty aswellits having zeroshortfall), expressed asapercentageofthepoverty line the meanshortfall fromthepoverty line(countingthenon-pooras Republic of Tanzania wherepoverty levels arehigher. Poverty gapis than poverty levels whichforexample donotcauseviolencein The The paperalsodiscussespoverty gapandwealthinequalitiesrather their ÂmoneyÊ closetotheirchestwaiting. as politiciansmake statementsandchest-thumbing,theinvestors hold easy todestroy, but extremely difficult andpainfultorebuild, indeed, lesson hereisthatperceptionininvestors isarealityanditvery growth again,despitetherelative stabilization of theeconomy. The stabilize five yearslaterandweareyettoreachthatlevel ofeconomic to $183millionin2008following thepost-electionchaosisstillto growth aftertheelections,withforeigndirectinvestment dropping violence andconflict. sectors whileimportanttoany economyarealsopronetoelection constitution (Kenya Constitution,2010).Interestingly, these three of choice,democraticandethicalinstitutionsasenshrinedinthe rights accesstosecurity, fairness &justice,publicservices,freedom services ofprotectionthepeopleÊs sovereignty, civil libertiesand services, water, shelterandthegovernance sectorisaccesstostate and industry. The socialsectorinvolves accesstoeducation,health infrastructure, agriculture(i.e.foodsecure,exports) tourism,trade paramount. The productive sectorincludesincreasedinvestments in focused priorityonitsproductive, socialandgovernance sectorsis model ofconverting inputsintooutputs.For any economytogrow resource utilization4andproductionprocessesefficiency economics (orgeopolitics),oftendefined asthesumtotalofregional issues, oftendriven byethnicagendaandlackinginregional–geo- campaigns inKenya have oftenfocusedonnon-economicinternal Unlike theeconomicsurvey 2011economicissues,election 4 3 2 PovertyGapIndex: The meanoverthepopulation oftheproportionate Private/PublicSector&Investment Advisor below thepovertyline,asapercentageofline. poverty gap,wherethegapisgivenbydistanceofpoor economic capitalmarkets),land(naturalresourcemarkets). Economic resources-Labormarkets,Capitalmarkets( 2 ers opinion oncontested December 2012 3 . erent individuals and and individuals erent ecting and analysing NO.6 fi nancial & 2 3 4

The economic literature that exists conclusively points to the negative effects The Impact of 2007/2008 Elections on Kenya’s does not recognize the role of peace, and peace building (even of its own negatively affected the low income groups. The high inflation put pressure Figure 2.3 Stock Exchange Performances election violence which led to burning and destructionIssue of transport 1 and of conflict (i.e. election violence, civil wars and political instability) to Economy agents) to improved growth in agriculture and in the economy. on the moderate and middle income groups who in turn put pressure on (2002-2008 communication infrastructure as shown in table 2.4 .figure 2.5 shows the economy decline. In particular, Chauvin, and Rohner (2009) in their study of government to increase salaries to the Doctors, teachers and University falling levels of revenue from the sector which was highly attributed to Horticulture is exclusively export orientated and an important part of GDP, the effects of conflict on the production structure of the economy, conclude The preceding discussion still does not remove doubts, uncertainty still lingers Dons. political instability. being one of the three largest foreign exchange earners in 2006 (with that civil conflict is a major reason for structural economic problems in over KenyaÊs forthcoming general election date. Indeed, the challenges tourism and tea), and taking the top spot in 2007. This export orientation Figure 2.2 shows little convergence between the world food prices and the developing countries like Kenya. This study makes three conclusions that facing IEBC, CIC, Ethics and Anti-Corruption Commission(EACC) and the Table 2:1: value of infrastructure output exposed the subsector to the election violence that reduced the exports of local market, which suggests that local factors, especially the post-election are important for the discussion herein; conflict reduces the share of the Judiciary, donÊt help either; the 2010 Constitution varied interpretations Sector 2003 2004 2005 2006 2007 2008 Kenyan flower exporters by nearly one quarter on average and by nearly violence, may also be playing a big role in the price increase. The post- manufacturing sector in GDP - in the case of a „an infant‰ manufacturing of various constitutional clauses for example, the date of elections, ethical 40% for firms located in conflict areas. Figure 1 displays the dramatic election violence led to the food price crisis which acerbated the disruption Electricity 18578.02 17,257.20 20,453.60 20,954.30 20,461.60 19,869.10 sector like that of Kenya it wipes out serious structural gains made over the matters, Public finance, political parties conduct etcetera remains divisive and increase in the exports of cut flowers from Kenya after the peaceful 2002 of policies that promote food production, dysfunctional input and output Water 6458.23 6,492.10 6,620.40 6,922.90 7,436.30 7,065.60 periods of sessional papers No 1 of 1986, 1994 and 1997 which emphasized controversial. This coupled with the high complications emerging from the elections. markets, inadequate subsidies to agricultural inputs, low food reserves, and sustainable growth, management and transformation of the manufacturing confusion in the political parties posturing and politicking on the ICC process Posts 68752.2 74,325.00 8,001.20 8,367.80 8,545.90 6,203.70 raising unemployment. The need for investment in enhancing agricultural Source: Nairobi Stock Exchange (2007; 2008) sector through the industrialization program. continues to create uncertainty in the economy and markets. Land 45230.56 46,513.00 47,636.10 50,278.80 58,054.10 52,427.70 Fig 2.1 Kenyan flower exports production for Kenya is also necessitated by the low ability to import In 2007/2008 similar or worse tension prevailed leading up to the elections. Air 12587.08 11,161.80 11,621.10 12,545.10 14,410.80 13,344.80 Conflict increases the exploitation of natural resources (forestry, water) and commodities. This is indicated by the ratio of agricultural imports to total The limited accessibility to financial services is due to the relatively high To-date social-economic effects of the post election trauma are still to be Source HCDA (2009) reduces the production of crops – as indicated in this paper the 2007/2008 value of merchandise exports. fees and commissions charged by banks as they tried to recover from the Total 151606.09 155749.1 94332.4 99068.9 108908.7 98910.9 election violence had a devastating effects on the (horticulture) flower industry, determined, however, the economic and human costs of the violence though In the period 2004-2008, Kenya spent almost 20 per cent of its export losses due to post election violence. The real deposit rate is also largely Mau forest in Kuresoi and reduced agriculture production in rift valley, and dramatic can be quantified and will have a long term impact on social relations revenue on agricultural imports (Figure 2.2). Post-election violence led to negative, meaning that depositors are not able to get full compensation for reduced outputs in the service sector (markets, transportation & banking) as and trust among ethnic communities for years to come. Various reports Fig 2.5: Revenue from the sector increased imports and reducing exports where a large cost of farm inputs their savings due to nominal deposit rates being lower than the inflation discussed below. Furthermore, collier and found that the industries that are have attempted to explain the social and economic impact of the election

Elections Dispatch No.6 Elections Dispatch No.6 Elections Dispatch No.6 rate caused by rise in food prices due to post election violence which led violence (World Bank, 2011), USIAD, 2010) (Andreassen, Barasa, Kibua and led to declining level of agricultural and food production. This could also be more institutional/transaction (export) and labour intensive (service) safer to property and food destruction. This discouraged saving and impedes Tostensen. 2008) none has specifically addressed its total short and long term attributed to fear of anticipated political unrest in the country by investors. most and are also less likely to recover unless supported. investment growth as shown in Figure 2.4. impact on the economy. Post-election uncertainties and unresolved conflicts may have been the cause Whereas competition amongst regions, sectors, firms and individuals in of food inflation given the high proportion of food component in overall

K Shs (Billions) Figure 2.4: Deposits and Lending rates. business and politics is healthy negative competition in politics has far – In the period 2002 2007 KenyaÊs economic growth was robust with a real inflation, which has been on average 50 per cent in the period 2000-2007. GDP average of 5.4%. In 2007 the real GDP reached 7.1%. The service 0 5 1015202530354045 reaching consequences for the economy than the reverse. Amidst election 1995 1998 2001 2004 2007 fever and complex regional/personal urge to gain a competitive advantage, sector, led by the tourism and telecommunications industry, was one of Year Fig 2.2 Ratio of imports to Agricultural Exports Source: Kenya Economic Report 2009 there are emerging internal sobering political dynamics with a new generation the main drivers of growth, indicating increased employment. However, strong economic growth had done little to reduce the countryÊs widespread of urban citizens that consider themselves as distinctly different from their Manufacturing and Construction older counterparts, least bothered about ethnic affiliations and therefore poverty because distribution was skewed in favour of the already affluent. difficult to manipulate using tribal messages, or is it? In 1998 2002 the poorest 20% of the population received only 6% of the Overall, the conflict reduced Kenyan flower exports by a quarter for firms The manufacturing sector suffered significant distribution setbacks as a national income, while the richest 20% took 49%. In addition, the population located in conflict areas mainly due to displaced labour, other exports result of limited supply of raw materials and heavy man-hour losses. The However, the democratic institutional structure to carry this group to the ballot suffered from generally high consumer price inflation, averaging around were reduced by 38 percent falling to a record loss of over Kshs.30 billion collective impact of these was reduced capacity utilization, and hence paper for a chance to participate in the election process is remote or non- 11% in 2003 07 (Getzel, C. 2000). in cut flowers from Kshs. 43 Billion in 2007. The effects lasting for over productivity of 30 percent in January and February of 2009 that was reflected existent. The question is, --- this group that contributed to increased use of three months of violence are shown in figure 2.1 (Horticultural Crop Source: World Bank (2011) reduced GDP growth. Employment in the small and medium enterprises in the social media and ICT applications such as the internet, face book, twitter The post-election crisis resulted in substantial damage to KenyaÊs Development Authority (HCDA, 2006). However, not all horticultural the affected rural areas also suffered setbacks, since shops, machinery and and other interaction platforms in the 2007 elections, going to extent the ICT social, infrastructural, institutional, and economic systems. To identify exporting firms were affected in the same way as indicated by the HCDA plants were either damaged or demolished during the violence in major critical influential factor in the race for the 2012 presidential elections in priority actions and to estimate the resources required to address them, (2010) report. Those that used only auctions to sell their produce were conflict areas and specifically in the rural market centres. Kenya to 2013 in a positive manner? How this constituency that was largely the coalition government found itself with a strategy called the National Source: Food Agriculture Organization Transport and Communications 5 worst affected and saw a drop in exports of 41 percent. Those that exported is ignored in past elections and the internally displaced persons (IDPs) mostly Accord with Agenda as the Implementation schedule under the National In addition, to an estimated 120,000 job losses in tourism, Kenya Association only via direct buyers saw a drop in exports of 26 percent, while flower The transport and communication sector was also adversely affected by women who lost their livelihoods, likely to affect the 2013 elections and Reconciliation and Emergency Social and Economic Recovery Strategy of Manufacturers (KAM, 2010) analysis estimates a temporary loss of exports that used both flower auctions and direct buyers only saw their Financial Services the violence. Unrest in Nakuru, Narok, Kisii, Kakamega and Naivasha the economy? It is no doubt that the future of KenyaÊs economic recovery (NARA) Implementation Committees2 of the same protagonists who were about 400,000 jobs with casual informal labour likely to be the hardest exports drop by 11 percent. effectively paralyzed transport to the western regions of the country, with still seething in dislike of each other as to who „stole‰ the elections. These currently at 3.9% depends on this 2013 election and future elections in The financial sector plays a critical role in the development process roadblocks erected at regular intervals on the roads. Lorries, commuter hit. The impact of the crisis was differential across geographical regions committees were periodically reporting to UN/AU through the president and neighboring countries will borrow in large measure from Kenya. Although the World Bank (2011) reports show that horticulture sub- through financial intermediation. Strong financial institutions are critical buses and private vehicles were burned. Destruction of the Nairobi-Kampala but the KAM report notes that the hardest hit areas were Kisumu, Eldoret, the Prime minister on the recovery progress. Overall, the donor community sector recorded an actual 15 percent higher (8.5 metric tons (MT)) than for increased investment, economic growth, employment and poverty Naivasha, Kisii and its environs. An estimated 40 percent drop in output With this scenario one wonders whether a repeat prospect is not in the offing? railway at Kibera disrupted supplies to western parts of the country and report (2010) concludes that the assessments provided in the NARA are in January 2007, this might indicate that flower exports are likely to be alleviation. Broadly, the financial system includes the banking sector, in the Western region of this sector in 2008/2009. Construction activity Well seemingly so if the shifting pre-election alliances formations aimed at Uganda, forcing re-routing to already insecure roads. an accurate reflection of the impact of post-election violence (PEV) on the maintained at the 2007 levels of 95,000 metric tons valued at about US$ capital markets sector, informal financial services sector and other non- slowed down after expanding over 10 percent in 2007 and preliminary data crafting an ethnic vehicle capable of capturing the state are anything to go by. business community. Although the report was a government view of the 613 million compared to the decline of over 24 percent in 2008/2009 (see banking financial institutions such as the insurance sector and pension It is more difficult to obtain information on other service sectors. However, suggests this sector is taking a wait and see approach. Indeed, the Kenya Private Sector alliance has argued that the political alliances impact of elections of selected sectors, it at least provided a government figure. 2.1). This impact is however not entirely correct as there is need to schemes. By end of December 2007, there were 45 financial institutions the fact that shops, stores and banks were closed during the crisis would and rhetoric is not good for the economy. As argued above, if the same players In contrast, in the year 2003 the exports in garments and apparel from view. For us to make anticipated conclusions of what might happen in assess the further displacement of flower-farm workers, increased cost of comprising 42 commercial banks, two mortgage finance companies and mean that these sectorsÊ contribution to GDP growth was negative in the remain in the game then we can assume that KenyaÊs forth coming elections Kenya rose due to African Growth and Opportunities Act (AGOA), which 2013 this survey reviews the most affected sectors of the agricultural sector security to flower farmers, and new arrivals displaced from elsewhere in one non-bank financial institution. first two months of the year. While the achievement of political solution will still be influenced to a large extent by ethnic manipulations. allowed African countries to export textiles and garments duty-free and (flowers); Small Enterprise, transport sectors and Financial services. into the affected areas. is likely to lead a recovery in these sectors but not rapidly due to lower In the capital market, the stock market capitalization rose from Kshs. 792 without import quota restrictions (Table 2.2). The decline observed in 2008 For several decades following its independence, the Republic of Kenya stood incomes, lack of supplies and imported goods as well as higher oil prices. Agriculture The World Bank (20011) estimated that there was across the board decline billion in 2006 to Kshs. 851 billion in 2007 but fell to 763 billion in the year was as a result of closure of some firms due to losses incurred due to the somewhat apart from this norm and was widely regarded as one of the most Small and micro credit associations report facing defaulters and are in the production of all main commodities, with the exception of the cut- 2008. The daily NSE 20 Share Index lost 201 points between December post-election violence and the influx of third class products which entered stable countries in an otherwise volatile region. But as has been observed this The agricultural sector bore the greatest brunt as it heavily relies on unskilled estimating between 15 to 40 percent of their repayments losses. While the flower sub-sector, averaging 25-30 percent in volume terms which had 2007 and December 2008 to close the year at 5,445 points (Government of the Kenyan market leading to unhealthy competition. reputation began to change following the beginning of a transition to multi-party labour often ÂmigrantÊ workers from outside the counties. The resulting financial health of larger banks is thought to be better, there is no hard begun to see recovery by end of 2010. Furthermore, post-election violence Kenya, 2009). The turnover, which is a measure of stock market liquidity, democracy in the early 1990s. The new power contests presented by elections disruption in labour supply affected the production process, farm schedules information. However, given the loss of output in the real sectors, financial interrupted the peak season for the short-rainsÊ beans and maize harvests also reduced by 6.6 per cent in 2008 compared to the previous year. Table 2.2: Export in Textiles provided a political outlet for the long-simmering ethnic rivalries which now and destruction of capital assets, which in turn distorted the demand and sectorÊs growth rate could decelerate to around 5-6 percent over the next and it is estimated that 30 percent of the crops was not harvested and This may have been caused by post-election violence which led to many Year Number of factories Exports in KSHS threaten to periodically escalate into inter-ethnic violence. Ogude (2010) has export patterns. KenyaÊs Economy Survey (2011) records a real growth in two years or so from almost 8 in 2007. Rapid recovery is expected in both were lost. Even for those farmers who had already harvested, there were investors reducing their investment in Kenya for fear of depreciation of the 2003 10 30,000,000 argued that this situation will not change in 2013 since a key element in KenyaÊs agriculture of 6.3 per cent in 2010 compared to 2.6 per cent in 2009. However, transport and communications sectors assuming that the political settlement post-harvest losses of not less than 10 percent (30,000 MT) because of Kenyan shilling. The performance in the stock market has been consistently the reasons the government of Kenya gives for this turnaround is the usual agreement is adhered to. 2004 15 70,095,508 presidential elections is the role of personalities in elections. impressive in Kenya. The Nairobi Stock Exchange (NSE) index grew by favorable weather, improved prices of exports and tea and Government improper on-farm storage, made worse with the poor short-rains harvest 185 per cent between December 2000 and December 2007 (Figure 2.3) but These two sectors have been growing at about 9 percent in 2005 and 2006 2005 25 119,907,104 I argue that this time around the candidates do not have significant influences intervention through provision of subsidized programs. There is no mention that followed in late 2008. Furthermore, the short rains were inadequate in started falling immediately due to post election violence .The NSE 20 share and preliminary growth rate for these two sectors in 2007 was about 8.5 2006 40 209,659,592 on the campaigns and voting patterns for 2012/3 Presidential race is unlike any to peace efforts by government (see NARA, GRRC and NSC committees) most of these areas and this resulted in both reduced production and lower index tracks the performance of the best 20 performing companies and does percent. Similar rates are expected in the next few years mostly from other previous one due to the supporting institutional framework led by the citizens, churches and civil society, clearly indicating that the government national food supply. 2007 36 261,214,768 Independent Electoral and Boundaries Commission (IEBC) and Commission not, therefore, represent overall market trends. A new index, Nairobi All capacity utilization in transport and from both investment and productivity Estimates by (USAID, (2009) on cereals in East Africa indicate that in total 2008 25 178,384,134 for Implementation of the Commission (CIC). 5 NARA was a GOK Social Economic Recovery strategy for economic recovery Share Index (NASI), tracking all the companies listed in the stock exchange, gains in the communications sector. The value of infrastructure output from along with two other committees i.e. Government Resettlement and Reintegration about 15-20 percent of the initially estimated 3 million MT of maize was was recently launched and it is expected to provide a more enhanced picture the sector reduced at an alarming rate in the year 2008 due to the post Committee (GRRC) for IDP resettlement and the National Steering Committee on lost in 2008, occasioning high inflation and increased cost of living that Peace Building and Confl ict Management (NSC) of the stock market performance as shown in figure 2.3.