Comments on: Is Kenya’s economy on the mend? http://blogs.reuters.com/africanews/2010/01/07/is-kenyas-economy-on-the-mend/ African business, politics and lifestyle Tue, 21 May 2013 14:16:31 +0000 hourly 1 http://wordpress.org/?v=3.4.2 By: AlyKhanSatchu http://blogs.reuters.com/africanews/2010/01/07/is-kenyas-economy-on-the-mend/comment-page-1/#comment-7929 AlyKhanSatchu Thu, 07 Jan 2010 13:59:54 +0000 http://blogs.reuters.com/africanews/?p=2648#comment-7929 The Economy as You quite properly pointed out was soaring in the Final Quarter of 2007 where GDP expanded by 7.1% and one sensed that the Country was on the runway and set for lift off. 2008 and 2009 were serious Body Blows and a little like Muhammed Ali and the first few Rounds with George Foreman. The Corner was ready to throw in the Towel and data as recent as the 3rd Quarter 2009 where Quarter on Quarter we shrank 0.8% signal we are still on the Floor. The 3rd Quarter was the Apogee of the Drought and as you correctly mention, the Rains have finally come and this Economy has a unique dependency on Hydrology [Energy and Framing refer]. The recent World Bank report was titled Kenya 'Still Standing' and that captures it well. Growth rates for 2008 and 2009 [versus the rate of Growth in the Population] mean we have been rowing backwards rather than forwards. Thats a Fact. The Political Dimension is still weighing over the Country. I do feel a Surgical strike by the ICC and a decapitation of some of the Prime Movers in that 2007/2008 debacle will be a very positive and a plain cathartic thing. On the Plus side. Kenya has many advantages. It has been practically a Laboratory experiment when it comes to Communications and the Information Century. There were 15,000 Mobile Phones 10 years ago, there are 17.4m now and that is no small thing. The Population is very young as well and history shows that Catch up happens when Your People are Young. Recent indications that China might be keen on developing a second Port at Lamu is also potentially a Game Changer. Kenya has a serious Geopolitical Advantage in the Region. It is the route to the Sea for near enough 160m Folk in the adjacent Countries and needs to leverage that. A lot of the Bounce back will be driven by Mood and Optimism. It has an outsize influence on an economy such as kenya's and given that is as close to rock bottom as I can measure it seems it can only go higher. We are already seeing optimism seep into the NSE and given that we were deep in a Fat tail, Optimism might well create a positive Feed Back Loop. So on balance, I would argue Yes, we have reason for cautious optimism but the Government needs to boost it a lot harder and quickly. They have raised a great deal of money in the Bond Market and they now need to ensure those Monies hit the ground and they also need to address the price of Maize which is 100% higher than International Prices and choking the spending power of the Wananchi at the bottom of the Pyramid. Aly-Khan Satchu www.rich.co.ke nairobi The Economy as You quite properly pointed out was soaring in the Final Quarter of 2007 where GDP expanded by 7.1% and one sensed that the Country was on the runway and set for lift off. 2008 and 2009 were serious Body Blows and a little like Muhammed Ali and the first few Rounds with George Foreman. The Corner was ready to throw in the Towel and data as recent as the 3rd Quarter 2009 where Quarter on Quarter we shrank 0.8% signal we are still on the Floor. The 3rd Quarter was the Apogee of the Drought and as you correctly mention, the Rains have finally come and this Economy has a unique dependency on Hydrology [Energy and Framing refer]. The recent World Bank report was titled Kenya ‘Still Standing’ and that captures it well. Growth rates for 2008 and 2009 [versus the rate of Growth in the Population] mean we have been rowing backwards rather than forwards. Thats a Fact.

The Political Dimension is still weighing over the Country. I do feel a Surgical strike by the ICC and a decapitation of some of the Prime Movers in that 2007/2008 debacle will be a very positive and a plain cathartic thing.

On the Plus side. Kenya has many advantages. It has been practically a Laboratory experiment when it comes to Communications and the Information Century. There were 15,000 Mobile Phones 10 years ago, there are 17.4m now and that is no small thing. The Population is very young as well and history shows that Catch up happens when Your People are Young.

Recent indications that China might be keen on developing a second Port at Lamu is also potentially a Game Changer. Kenya has a serious Geopolitical Advantage in the Region. It is the route to the Sea for near enough 160m Folk in the adjacent Countries and needs to leverage that.

A lot of the Bounce back will be driven by Mood and Optimism. It has an outsize influence on an economy such as kenya’s and given that is as close to rock bottom as I can measure it seems it can only go higher.

We are already seeing optimism seep into the NSE and given that we were deep in a Fat tail, Optimism might well create a positive Feed Back Loop.

So on balance, I would argue Yes, we have reason for cautious optimism but the Government needs to boost it a lot harder and quickly. They have raised a great deal of money in the Bond Market and they now need to ensure those Monies hit the ground and they also need to address the price of Maize which is 100% higher than International Prices and choking the spending power of the Wananchi at the bottom of the Pyramid.

Aly-Khan Satchu
http://www.rich.co.ke
nairobi

]]>