Kenya’s Supreme Court is this week hearing petitions arising from the elections held earlier this month and, depending on the outcome, the uncertainty may be over by next week or the country may experience a re-run of the election in two months’ time. While the uncertainty remains, the economy is at a standstill and businesses have been accumulating cash to tide them over, instead of investing it.
According to a report in The East African, a survey of the financial results released by companies listed on the Nairobi Securities Exchange reveals that the majority of them have been holding more cash than they held in the previous financial year. Banks, in particular, have been increasing their cash positions and improving their liquidity ratios, rather than loaning it out in what is regarded as a high-risk environment.
Although there was violence and numerous deaths in the coastal region on election day and in the weeks leading up to the elections, the elections and their aftermath have so far been much more peaceful than the last elections, and most Kenyans are cautiously optimistic that stability will prevail. Most businesses will be hoping for a quick recovery when the election uncertainty is over, to compensate for the slow-down during the election period.