Cautious Optimism as Calm Returns

By Bohnstedt, Andrea; Onyango, Denis et al. | African Business, March 2008 | Go to article overview

Cautious Optimism as Calm Returns


Bohnstedt, Andrea, Onyango, Denis, Versi, Anver, African Business


Kenya is counting the political, economic and social cost of the eruption of violence that followed the now discredited presidential elections. The image of Kenya as a stable, harmonious nation has been tarnished, but many see the tragedy as an opportunity to build a better, more accountable country. Andrea Bohnstedt and Denis Onyango write from Nairobi for our special 'Eye on Kenya' report. Additional reporting by Anver Versi.

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As we were going to press, a degree of calm had returned to Kenya but tensions were still high in the countryside and the country's productive heartland, the Rift Valley. By mid-February, it appeared that through Kofi Annan's diplomatic skills, a political solution had been found.

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Following discussions between Annan and teams from the government as well as the opposition, the two sides, Raila Odinga's ODM and Mwai Kibaki's PNU had agreed to a "comprehensive review" of all aspects of the 2007 presidential elections. The review panel will comprise local and international experts. The process is expected to begin on 15 March.

The 10-point deal will also include rewriting the constitution within one year and reforms of the electoral law. A 'Truth, Justice and Reconciliation' committee will also be formed.

Details of the deal had not been released as we went to press.

Foreign diplomats, representing substantial economic interests from their countries, warned both sides of grave consequences if they failed to reach agreement but Justice Minister Martha Karua rounded on them and asked them to desist from making threats.

"I would like to remind them that we are not a colony and they should adhere to the diplomatic convention of not interfering with sovereign states."

On the same day the agreement was signed, US president George Bush announced that US Secretary of State, Condoleezza Rice, would visit Kenya to "put pressure on both sides to reach a deal". This caused alarm among some politicians and the public. The US is seen as a 'bull in a china shop' whenever it has tried to intervene in African affairs, as the sorry example of neighbouring Somalia attests. "Please Mr Bush," pleaded a newly-elected MP, "keep her at home until we have resolved this delicate issue."

Cost of chaos

Now that a measure of stability has returned to Kenya, the business community is counting the cost of the 'period of madness' and wonders how long it will take to return Kenya to economic equilibrium.

Early in February, while the country's political leadership dithered and stood impotently on the side lines, Kenya's business leaders went into action.

Michael Joseph, CEO of one of Kenya's largest and most profitable companies, Safaricom, teamed up with GM's Bill Lay and the Kenya Private Sector Alliance (KEPSA), to call Nairobi's top business managers to the Grand Regency Hotel to address the devastating economic fallout from the contentious December 2007 elections.

Nearly 300 managers and directors, amongst them some of the largest corporate players, sent a message to Kofi Annan's mediation team--this cannot go on any longer if you don't want to destroy our economy.

At that point, Kenya had been through several weeks of violence, destruction and ethnic cleansing. Key data summarised at the meeting: January inflation between 18% and 20%, GDP growth at best around 4%, but nudging towards zero if the crisis persisted much longer, a transport sector in disarray, with many trucks and buses destroyed and roads shut down by illegal roadblocks, a tourism sector on its proverbial knees.

The official death toll had reached 1,000, but was widely believed to be much higher. More than 300,000 people were displaced within the country.

By mid-February, Nairobi and Mombasa had mostly calmed down, but Western Kenya remained uncontrollable.

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