Friday, April 19, 2024

Businesses lose billions from Saba Saba shutdown

Empty parking lots, clear streets and shuttered shops characterised activity in most parts of Nairobi Monday as businesses and residents acted to limit their exposure to a possible outbreak of violence at an opposition rally.

The shutdowns caused by Cord’s Saba Saba rally at Uhuru Park are estimated to have cost the economy billions of shillings in lost opportunities whose extent could not be immediately determined.

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David Gachuru, who chairs the Nairobi Central Business District Association, said economic activity was down 50 per cent in the capital which accounts for nearly 60 per cent of the country’s annual output.

“I don’t have specific figures but the normal production has been significantly disrupted,” he said, adding that the country needs to find solutions to its challenges as soon as is possible.

Most retail stores stayed closed throughout the day, highlighting the impact of high-voltage politics on economic activity.

The tense political atmosphere, however, had no impact on the stock market, which opened to little activity but picked up in the afternoon. Equity turnover jumped 59.1 per cent driven by a buildup of foreign investor interest on large cap counters.

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Foreign investors accounted for 70.2 per cent of the day’s trading compared to 33 per cent last Friday, signalling that investors expect the political heat to cool off in the near term.

The Saba Saba rally, which was scheduled to kick-off at 10am, started nearly five hours later at 3pm when Cord leaders Raila Odinga, Kalonzo Musyoka and Moses Wetang’ula arrived at Uhuru Park.

Mr Odinga and opposition chiefs arrived at the venue hours after the High Court overturned Justice Isaac Lenaola’s Friday ruling that barred the Cord coalition from calling for mass action.

The rally was beamed live on international media channels such as Qatar-based Al Jazeera even as local TV stations stayed out of live coverage in the wake of the Communications Authority of Kenya’s warning at the weekend against the broadcasting of content that borders on incitement.

Monday’s rally was expected to be the climax of the political tension that has been building up since Mr Odinga returned from a two-and-a-half-month stay in the US with demand for national dialogue with President Uhuru Kenyatta’s government on a list of issues, including tribalism and exclusion in government, high cost of living, insecurity and rising public debt.

The ensuing political tension saw the shilling open the week quietly with the Central Bank of Kenya quoting it at 87.87 to the dollar, a three-week low.

Analysts reckoned that should the simmering political tension continue in the coming months, it would hurt Kenya’s economic fortunes and erode the country’s appeal to foreign investors.

“Persistent tension will project Kenya to the world as a nation with an unstable regime,” said Robert Bunyi of Mavuno Capital.

Mr Bunyi added that political stability plays a huge role in shaping investors’ assessment of risk in a country, making it imperative that a lasting solution is found.

The Kenya Private Sector Alliance, a lobby group, last week pleaded with politicians to tone down their rhetoric and find amicable solutions to the country’s problems in the interest of economic stability.

The rise in political heat came as official data showed that Kenya’s economic growth has slowed down in the wake of rising insecurity and bad weather.

Growth slid to 4.1 per cent in the first quarter from 5.2 per cent in the corresponding period last year.

The World Bank last month reviewed its projection of annual growth for Kenya’s economy to 4.7 per cent or 0.5 percentage points below the 5.2 per cent it had forecast six months ago.

City Hall, the seat of the Nairobi county government, on Monday reported a dip in parking fee collections citing the low number of motorists who drove to the city centre.

Nixon Otieno, the county’s chief revenue officer, told the Business Daily that most motorists had opted to leave their cars home fearing violence.

Nearly a quarter of the parking lots remained unoccupied in mid-morning but emptied out in early afternoon when up to 80 per cent of the slots in the central business district were deserted.

There was trouble in the lakeside town of Kisumu — the opposition’s support base — where residents engaged in running battles with the police for most part of the day, bringing business to a standstill.

“The number of public service vehicles on Kisumu roads fell to half and half the business stalls were closed,” said Tom Ongaya, the secretary-general of Kisumu Central Business District Association, urging for a peaceful settlement of the political differences.

In Nairobi, fares on several routes dropped by up to half as operators struggled to woo the low number of commuters on the roads.

Residents of Nairobi’s Kasarani area paid Sh50 instead of the normal Sh100 during rush hour while those in Ruaka paid Sh50 instead of Sh70.

The Matatu Owners Association (MOA) estimated that the sector lost 60 per cent of daily revenues.

“We have lost more than half of our daily revenues because most small-scale traders stayed away from the CBD,” said MOA chairman Samuel Kimutai.

Small traders account for more than 50 per cent of commuters who use public vehicles every day, he said.


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