Kenya politics: Rerunning the presidential election

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Economist Intelligence Unit
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Politics, News Analysis
Political Geography

Political tensions will remain elevated in the near term after the Supreme Court, on September 1st, annulled the result of the presidential election held on August 8th. The judges, by a 4-2 margin, blamed the Independent Electoral and Boundaries Commission (IEBC) for numerous irregularities that cast doubt on the outcome. The IEBC initially declared Uhuru Kenyatta (Jubilee Party) the winner, by a 54.2% to 44.9% margin over Raila Odinga (National Super Alliance, or Nasa), but the contest will now be rerun within 60 days of the court ruling, as laid out in the constitution. The IEBC proposes October 17th as the new election date, although this has yet to be agreed by all stakeholders. The Supreme Court's intervention bolsters the rule of law and the supremacy of the constitution, but poses numerous short-term challenges and perpetuates the uncertainty surrounding the electoral process, to the possible detriment of business activity.

The Supreme Court has still to deliver a full and detailed judgement (which could take 21 days), making it hard to assess the scale and nature of the irregularities, but evidence in court pointed to the manipulation of both paper and electronic records, as well as unauthorised access being gained to the IEBC's computer systems. Suspicions persist that the brutal murder of the IEBC's ICT boss, Chris Msando, a week before the election, compromised the election's integrity, although this remains unproven. The chief justice, David Maraga, and three of his colleagues clearly believe the irregularities were serious enough to warrant a rerun, although the two dissenting judges think that any flaws were too minor to affect the result.

Election logistics are challenging

Organising the rerun will be challenging, not least because of the IEBC's tarnished reputation and its constitutionally mandated role in handling elections in Kenya. There will be insufficient time to replace the seven IEBC commissioners, who were appointed in January following an all-party agreement-and who escaped direct blame for the irregularities-but the IEBC secretariat will probably be purged. Pre-election disputes about ballot-printing contracts and the supply of election technology will also be revisited-further aggravating tensions-while new checks and balances will need to be put in place to ensure the rerun is not also tainted by fraud. It seems highly probable that the Supreme Court will be obliged to make a series of rulings to ensure the election is held by the 60-day cut-off point (October 31st).

The IEBC's newly proposed date of October 17th would meet the deadline, but Nasa is objecting because of not being consulted, leaving the precise timing subject to change. Nasa also believes that tackling irregularities should take priority over setting a date, and could boycott the poll in the absence of reforms, although we currently expect Mr Odinga to take part, helped by Supreme Court oversight of the process. A delay beyond end-October could lead to the formation of a temporary, interim government, depending on how the constitution is interpreted. Alternatively, a constitutional amendment would be required.

A close contest is in prospect

Predicting the winner of the rerun is challenging, given the lack of firm details about the scale and nature of the manipulation. Unless fraud was rampant, Mr Kenyatta's winning margin (of 1.4m votes) suggests he will be hard to defeat. The Supreme Court also specifically exonerated him from any direct blame. However, the exposure of manipulation in favour of the incumbent will work against Mr Kenyatta, while Nasa's court victory will enthuse opposition supporters. We believe that the rerun will be a lot closer and that neither side is assured of victory. A run-off within 30 days of the rerun is also a possibility if either of the main candidates fails to cross the 50% threshold in the first round, which would further extend the period of uncertainty to end-November. The IEBC proposes that the rerun be limited to the top two candidates (thereby avoiding a run-off), but whether this is legal remains to be determined.

The short-term economic impact

The election rerun will have a dampening effect on business and the economy in the short term because of the uncertain outcome-which will mute confidence-and the risks of violence at all stages of the process. This could lead to delays in investment and stockbuilding, and to business closures near election day. Stockmarket investors will also be nervous after the Supreme Court ruling pared back recent gains. The election may, however, be less disruptive than in August, as only the presidential election will be rerun, not the contests for parliament and the county authorities. Evidence of fraud in the presidential race could spark legal challenges by disgruntled losers in the other contests, but any reruns would be intermittent and on a seat-by-seat basis. Apart from election-related factors, economic performance will also be affected by the direction of inflation-which edged back up to 8% in August, from 7.5% in July, because of costlier food-and the quality and distribution of rainfall during the short wet season in the fourth quarter.

Post-election economic prospects

The post-election economic impact will partly depend on the identity of the victor, although, as we noted before the August 8th ballot, both main parties support a system broadly based on free markets, meaning there are unlikely to be any major policy shifts. Nonetheless, a victory for Mr Kenyatta would signal continuity of policies and personalities (in some cases), whereas a win for Mr Odinga would lead to the restructuring of government, such as the appointment of a premier cabinet secretary (a de facto prime minister). Such reforms, alongside the need to share out positions between the four main parties in Nasa, would take time and would not necessarily be smooth, even in the absence of major policy shifts. Mr Odinga and Nasa may take a harder line on corruption, which would be positive, but the problems are too deep to solve solely by a change of leadership and instead require sustained institutional strengthening. More negatively, Nasa may be more focused on workers' rights, perhaps leading to tighter labour laws. Whoever the next president is faces the same fiscal constraints because of several years of heavy borrowing alongside slower revenue growth in 2017 (in line with economic performance). An Odinga administration would probably focus less on mega-projects and more on county-level developments, creating both challenges and opportunities for business.

The election rerun carries inevitable risks of violence and disruption, but this will be minimised if the contest is manifestly free and fair, unlike in August. Some clashes between police and protesters are possible, but violence will probably be localised. Business activity will remain subdued during the election process, but we expect a post-election rebound, regardless of the victor, although poor rainfall during the short wet season would hinder the recovery. Provided the outcome of the rerun is broadly peaceful, the Supreme Court's intervention, by bolstering the rule of law, will strengthen Kenya's longer-term prospects.

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