Kenya’s opposition protests put Intra-EAC trade in limbo

By Remie OTIENO

It’s been two days since the Kenyan opposition held the first of the two planned weekly protests in its second phase of the resistance against President William Ruto’s administration.

And with Thursday demonstrations fast approaching, the Azimio La Umoja One Kenya Coalition, under the orders of Raila Odinga, will once again rally its supporters to protest against the high cost of living, joblessness, and alleged electoral theft.

In reality, those dissents have not only hobbled the country’s economy but also shown early signs that they pose the potential threat to exacerbate intra-regional disarray in mutual trade and huge economic costs.

Observers are now cagey and are worried that the continued lack of a truce between the combatant camps could as well result in a possible financial market tumble.

“We urge all stakeholders to exercise calm and engage in dialogue to address any differences that may exist in the supreme interest of national unity and reconciliation,” cautioned the Chairperson of the African Union Commission, Moussa Faki MAHAMAT in a statement Tuesday.

The uncertainty surrounding tomorrow’s and future anti-government protests in Kenya is dreaded and could damage business investment and trading relationships with the East African (EAC) bloc and partner members like Uganda and the Democratic Republic of Congo – DR Congo stands to lose big.

The duo are Kenya’s key trading partners and could bear the brunt of those disputes by virtue of their geographical sitting.

Both Uganda and the mineral-rich country of DR Congo, the latter of which joined the bloc last year, are landlocked and massively rely on their neighbor Kenya for economic survival for imports and export through the port of Mombasa.

Some of the key exports to the Felix Tshisekedi – led country for instance, are animal and vegetable fats and oils, pharmaceutical products, tobacco, iron and steel, leather and footwear, vegetables, fruits, nuts, plastics as well as paper and paperboard among others which are mainly transported by road.

The distance between Kenya and the Democratic Republic of the Congo is about 1697 kilometers. Typically it takes about 5 days to one week for a truck to journey from Mombasa to the furthest destinations in DRC, Rwanda, and Burundi, a stretched distance of several miles across both Kenya and Uganda.

Kenya is also Uganda’s main supply route for essential goods including fuel to DR Congo and other markets like Burundi and South Sudan.

Uganda’s export receipts to Kenya for instance, are estimated to have climbed last November according to the Bank of Uganda (BoU) report, despite trade blockades, hitting $ 62.7 million (Shs231b), the highest in over three and half years.

On the other hand, the country’s exports to Kenya registered a 25 percent increase from the $ 46.8 million (Shs173b) earned in October, a clear sign of Kenya’s prominence in the bloc.

The planned riots will once again target the pathway and more likely than not disrupt business activities along the Northern Corridor highway which aids in the movement of goods – a critical linkage connecting Kenya to the rest of Eastern Africa.

This week, a regional news outlet reported that Monday demos paralyzed operations in the western towns of Kisumu, Homa Bay, and Busia and spilled into Uganda, affecting business in Busia, a border town on the Ugandan side.

Such challenges tend to affect investors in the Partner States who while boasting of having access to other African markets COMESA, SADC, and AfCFTA as well as to international markets through preferential trade arrangements, heavily depend on Kenya as a key linking souk to their goods and services.

Political unrest tends to have a negative economic impact as consumers become spooked by uncertainty and output is lost in manufacturing and services. As a result, the IMF estimates that in a typical period of about 18 months after the most serious unrest events, the gross domestic product is usually about 1 percentage point lower than it would ordinarily be.

Private sector bodies like Kenya Private Sector Alliance (KEPSA) have already termed such actions as the kind that “undermine the future of the country, cause economic damage and cause apprehension and fear.”

“The weaponization of the country’s economic drivers is causing unnecessary losses to the tune of about Sh 3 billion daily. For a struggling economy, hard hit by the effects of a prolonged drought, general elections, and economic slowdown last year and compounded by general global economic challenges, Kenya can ill afford the political activities currently at play,” noted KEPSA in a statement yesterday.

Part of this article first appeared on People Daily