Africa News blog

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Is Kenya’s economy back on track?

June 9, 2008

kenya_safaricom_buyers.jpgOnly a few months ago, it seemed all doom and gloom for the Kenyan economy as post-election violence threatened to wipe out gains and stymy growth.
 
Tourists were cancelling safari and beach holidays in their droves. Gangs were rampaging around the agricultural heartlands. And few would dare to journey on roads full of boulders, burning tyres and knife-wielding youths.
 
Yet even back then, some analysts argued that East Africa’s strongest economy should be able to withstand the electoral crisis, provided it was brought to a rapid halt.

And stop it did, after President Mwai Kibaki and Prime Minister Raila Odinga buried their differences over who won the Dec. 27 vote in a coalition government formed in April.
 
Now foreign and local investors have given a resounding thumbs-up to Kenya’s economy via the largest InItial Public Offering in the region’s history. The offer for mobile operator Safaricom was over-subscribed by 532 percent, shares leapt 50 percent in the first hours of trading and 860,000 people bought shares via the IPO. 
kenya_safaricom_kibaki2.jpgSo is Safaricom indicative of Kenya’s recovery, or is there still a long way to go?
 
Have investors got over the shock they received earlier this year?
 
How does Kenya compare to other sub-Saharan African nations — neighbours Uganda and Tanzania; or heavyweights South Africa and Nigeria — as an investment destination? Which are the sectors to put money in?
 
And can the shaky coalition hold?
 

Comments

I live and work right here in Nairobi. My country Kenya is currently on a recovery path following the post-election chaos. However, there are good signs showing that the country indeed did survive the chaos. Other than the delicate tourism sector, and the agricultural sector, everything else seems to have had little negative effect due to the long-term fundamentals that support these sectors.

Anyway, there are several sectors that seem very promising, judging from the outcomes that we are having.

Top of the list is the NSE (Nairobi Stock Exchange). This seems like a favorite investment vehicle, for local and foreign investors. However, investors are advised to have a mid-to-long term approach in order to maximize benefits that accrue. Due to the high growth, there are projections to double the market capitalization of the bourse in the next 5 yrs. Please do consult a local brokerage firm in order to get more details.

Another sector seems to be the ICT sector that is perhaps the fastest growing sector in the economy to date. There are vast growth opportunities especially in the telecommunications sector, plus BPO (Business Process Outsourcing), Software development, hardware support, etc.

There are also other many opportunities in the retail market. Please do consult me, in the case that you have more specific questions or even general comments. My email: jwahii@gmail.com. Mobile: +254721817254

Thank you all, and welcome to Kenya. Karibu sana.

Joseph

 

I think that the economy is back on track although it will take a lot from the politicians for life to really get back to normal. As it is many people have been laid off in the hotels or have been forced to take pay cuts. What Kenya needs is political goodwill.

Posted by Ann | Report as abusive
 

I hope it’s back on track because honestly Kenya is the engine for the rest of east africa.

http://blogs.spacelinx.com

 

Lets hope the economy is back on track becuase the analysts are very negative about this year. BMi have reduced their GDP growth from 6.15 to 1.0% for 2008! http://tinyurl.com/5jho4n

Posted by Wonda Joseph | Report as abusive
 

Hellen i hope that it’s back on track.Thanks for this blog.

 

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