Kenyan Court Backs President’s Vote Win, Ending Uncertainty

NAIROBI (Capital Markets in Africa) – Kenya’s top court upheld Uhuru Kenyatta’s presidential-election win, ending three months of electoral uncertainty that have slowed growth in East Africa’s biggest economy. Stocks gained the most in two months.

Kenyatta won the rerun fairly and electoral authorities’ failure to hold polling in the country’s western region didn’t invalidate the outcome, the Supreme Court ruled Monday, rejecting all of the petitions challenging the vote.

 “The court has unanimously determined that the petitions are not merited,” Chief Justice David Maraga told a packed courtroom in the capital, Nairobi. “The presidential election of Oct. 26 is hereby upheld.”

The ruling concluded a standoff that began with an Aug. 8 vote and has weighed on Kenya’s image as one of the continent’s top investment destinations and a regional hub for companies including Alphabet Inc. and Coca-Cola Co. The reaction from opposition leader Raila Odinga, who boycotted the October polls, will be crucial in the wake of protests against Kenyatta’s initial victories that human-rights groups say left as many as 80 people dead.

Shares on the Nairobi Securities Exchange rallied after the announcement, with the benchmark FTSE NSE Kenya 25 Index climbing 1.4 percent to the highest close since Sept. 22. The yield on Kenya’s $2 billion of Eurobonds due in June 2024 fell four basis points to 6.01 percent by 4:41 p.m. in Nairobi, the lowest in almost three weeks. The shilling pared its 0.4 percent loss before the ruling to trade 0.1 percent weaker at 103.65 per dollar.

Unifying Mission
Kenyatta, who’ll be sworn in next week and form a new cabinet, now needs to unite a country that’s so politically divided that some are advocating independence for regions that support the opposition. The world’s largest shipper of black tea is also seeking to reinvigorate growth that’s forecast to slow to 5 percent from 5.8 percent last year and cut unemployment that affects more than a third of the workforce.

The Supreme Court’s judgment was the second on an electoral outcome this year, after it set an historic precedent for Africa by throwing out Kenyatta’s August victory. Electoral authorities had failed to disprove the opposition’s claim of vote-rigging, it said at the time.

Odinga urged supporters to boycott the rerun, saying reforms hadn’t been enacted to allow fair polling. Kenyatta won a landslide in that vote, in which just 38.8 percent of the electorate cast ballots, compared with 79 percent in the first round. The court petitions by a former lawmaker and two activists alleged the electoral body flouted the constitution by failing to hold fresh nominations.

‘Challenging Authority’
“More than 50 percent of registered voters didn’t participate in the election” rerun, said Nanjala Nyabola, a Nairobi-based independent political analyst. “That creates a grievance that won’t go away lightly and will give many people, not just the opposition, grounds for constantly challenging state authority over the next five years. That’s a problem for the whole country.”

A former prime minister who’s now failed in four presidential bids, Odinga vowed to lead a campaign of mass resistance after Kenyatta was initially declared the winner of the second vote. 

The 72-year-old, who’s blamed previous defeats on vote-rigging, has urged supporters to boycott companies his alliance says backs Kenyatta’s government, including Safaricom Ltd., the region’s biggest mobile operator. The company has denied any wrongdoing.

“We consider this government to be illegitimate and do not recognize it,” Salim Lone, an adviser to Odinga, said in an emailed statement. “This position has not been changed by the court ruling, which did not come as a surprise. It was a decision taken under duress.”

A dispute over the outcome of a 2007 election in Kenya triggered two months of ethnic violence that left more than 1,100 people dead.

The court’s ruling should provide “gloss and much-needed legitimacy” to Kenyatta’s vote win and settle the legal challenge, although “political tensions” with the opposition may continue, according to Ahmed Salim, vice president at Dubai-based Teneo Strategy.

“Kenyatta was never going to enjoy a honeymoon period, even if there was no political crisis related to the elections,” Salim said in an emailed note. “The economic slowdown due to the extended election season will stretch well into 2018. The country’s fiscal and debt outlook will be Kenyatta’s biggest economic challenge.”

Source: Bloomberg Business News