Kenya. Pension sector outlook positive despite election uncertainties
Kenya’s real Gross Domestic Product (GDP) growth has a history of slackening during election years. During this period, fund managers and individuals put investment decisions on hold pending a return to normalcy in the political scene.
The extremity of the December 2007 elections, which sunk growth to 0.23 per cent in 2008 from 6.85 per cent a year earlier, stretched the speculation on political risk for subsequent years.
In 2013, GDP decelerated to 3.80 per cent from 4.57 per cent while in 2017, during which Kenya had a double presidential election, economic growth slowed to 3.82 per cent from 4.21 per cent in the previous year, according to figures by the Central Bank of Kenya (CBK).
During election years, investors are quick to offload their holding from the Nairobi Securities Exchange (NSE) and fund managers take a conservative approach, tucking their clients’ cash in safe assets particularly government securities. This year, however, the growth outlook is positive.
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