Guarding economy against Kenya’s election tensions

What lies ahead. As Kenya approaches the 4 March election date, the rest of East Africa, particularly Uganda is keenly watching and anticipating that the country does not have a repeat of 2007/08 that nearly forced the region on its knees. The 2007/08 post election violence claimed about 2,000, injured about 10,000 and displaced over 120,000. It caused an acute shortage of supplies to countries including Rwanda, DR Congo and parts of South Sudan.

In less than two months, Kenya will be going to the polls, however, East Africa particularly Uganda remains jittery considering the violence that masked the region after the 2007/08 elections.
After a disputed election in 2007/08, a section of Kenya went haywire, accusing Mwai Kibaki, the then incumbent president of snatching Raila Odinga’s victory.

The resultant melee struck Uganda hard as rioters blocked the movement of merchandise destined for the country and uprooted rail slippers linking Uganda to Kenya.

The violence in equal measure affected trade in Rwanda, DR Congo, Burundi and parts of South Sudan.

All the above landlocked countries apart from South Sudan rely on Mombasa Port as the main link to the sea and an entry point for much of their merchandise and trade.

As rioters took charge of some routes along the northern corridor – blocking road links to Uganda, trade in the country was forced on its knees causing an acute shortage of essential commodities including fuel, sugar and other consumables.

It is understood that the government could have lost Shs1.5 billion in daily revenue collections during the violence, which took about a month to fizzles.

Meanwhile, according to Kacita, about 20 traders lost goods and other properties in the melee amounting to about Shs56 billion.
Fuel prices shot through the roof selling for an average of Shs10,000 for every litre of petrol and Shs7,000 for diesel down from Shs3,300 and Shs2,700 respectively.

With a volatile price environment and the resultant shortage of key commodities, a spike in inflation hurt Uganda’s economy, forcing Kampala into panic as it searched for solutions that could end further damage.

However, upto now, there are so many traders who are yet to be compensated for losing goods and property estimated at about Shs128 billion ($48 million).

The Kenyan government and authorities at the East African Business Council have reportedly been in negotiations that seek to compensate 12 Ugandan and one Rwandese trader who lost their merchandise during the post-election violence.

In an interview with Prosper, Mr Everisto Kayondo, the chairman Kampala City Traders’ Association, said the violence is still fresh in the minds of some traders who five years down the line have not been compensated for the losses incurred in the process.

He says traders who had been told they would be compensated by the Kenya government have been kept waiting with nothing coming their way.

Thus with such a sticky background, it remains to be seen how Uganda has prepared itself in the event that violence breaks out again during or after the March general elections.

The Jinja Fuel Reserves, which had for years remained empty, are some of the major pointers that are likely to vindicate the government on how it is prepared for any eventuality during March.
A recent research conducted by Prosper indicated, according to available information that the reserves would most likely be filled with fuel before the March.

However, it remains to be seen if government will achieve the ultimate goal of filling the reserves this month.
When contacted about the matter, the Energy state minister, Simon D’Ujanga, said: “I can not discuss this matter with you but be sure all thing are being taken care of.”