Political uncertainty in Kenya has slowed down growth in Kenya’s private sector to its lowest point in three years, according to a bank survey.
It shows that businesses are holding off major investments as they await the outcome of Kenya’s election re-run, while the existing interest rate cap on commercial lending has made it even harder to access bank loans.
The research conducted by Stanbic Bank shows that a key indicator of Kenya’s economic health dropped for the 5th consecutive month to its lowest since 2014.
According to Jibran Qureishi, an economist at the Stanbic Bank, Kenya’s private sector has been deteriorating due to the political stalemate.
The country held general elections in August, but the Supreme Court annulled the results over irregularities.
A re-run will be held in three weeks’ time.
Many investors are said to have adopted a wait-and-see attitude pending the fresh election.
Qureishi also said firms are finding it harder to access credit as banks hold back their money because of the current cap on interest rates which the government imposed two years ago.
Since then banks have largely shied away from high risk financing, slowing down economic growth.