After enduring seven days of anti-government protests, Kenya’s stock market on Wednesday took its first hit after it lost Sh20 billion in investor wealth, joining a growing list of businesses among them banks, airlines and supermarkets that are counting losses running into billions of shillings from the demonstrations.
Local airlines, including Safarilink, say passenger bookings have dropped by up to 40 percent in the last few days with key routes such as Kisumu and Mombasa affected, adding to the low numbers likely to hit Kenya’s high season for tourism.
“Passengers have postponed their travel plans and as such, we are seeing reduced bookings and cancellations on our flights more so on Mombasa and Kisumu routes,” Safarilink CEO Alex Avedi told the Business Daily on Wednesday.
Banks in Nairobi, which had endured previous protests to remain open, on Wednesday remained largely closed alongside the public transport sector and supermarkets, which have become the easy targets of protestors since the start of the opposition-led protests, significantly hurting their cash flows.
Investors at the Nairobi Securities Exchange (NSE) on Wednesday lost Sh20.725 billion in paper wealth on the first of three days of the countrywide protests.
This is a departure from the past where the bourse gained on each of the days the opposition-led protests happened in Kenya, a pointer that foreign investors are now getting worried about the rising political tension.
The NSE closed the day with a Sh1.73 trillion in market capitalisation from Sh1.75 trillion on Tuesday, with the NSE-20 share index tumbling 13.48 points to close at 1627.6 points.
The contraction in investor wealth point to the fear that has gripped the country as anti-government protests gather pace over the high cost of living and the recently-enacted Finance Act 2023.
The demonstrations are led by the Azimio la Umoja coalition and are expected to continue on Thursday and Friday.
The tourism industry also joined the list of casualties on Wednesday after airlines started recording record low bookings with passengers cancelling or rescheduling flights.
The high season for Kenya’s tourism sector starts in June as locals and internationals flock to the coastal hotels and beaches.
The period also comes with a bump in advanced bookings for those seeking to come for the famous July-August wildebeest migration in the Maasai Mara Game Reserve.
AirKenya managing director Dino Bisleti said should the protests turn ugly, then cancellations of flights will be inevitable.
The airline mainly flies to Kilimanjaro, Maasai Mara, Amboseli and Samburu, among others from its hub in Nairobi.
“We haven’t seen any cancellations so far on routes such as Amboseli and Maasai Mara. However, if this strike is going to persist and take an ugly turn, we are going to take a big hit mainly on cancellations,” said Mr Bisleti on Wednesday.
About 3.1 million people are directly employed in the industry, Kenya’s third-biggest source of foreign exchange, with its abundant wildlife and picturesque Indian Ocean beaches the main attractions.
The Azimio la Umoja opposition coalition has since the start of the month been leading Kenyans to demonstrate the high cost of living and push for scrapping of the Finance Act 2023 in protests that have taken a toll on the economy.
Some of the establishments notably supermarkets and passenger service vehicles have also been vandalised, fuelling investor fear in an economy reeling from tough times.
Counties such as Nairobi, Mombasa and Kisumu that depend on parking fees as a major source of revenue are also booking losses running into millions of shillings as motorists remain at home in the wake of the protests.
The government has sought to put on a brave face and reassure investors of their safety and that of their businesses in a bid to avert huge losses in an economy struggling to create jobs.
The Kenya Private Sector Alliance estimates daily losses at Sh3 billion attributed to business closures, looting and vandalism.
“We will be engaging through appropriate channels to ensure that the international community is not sucked into conspiracies that are aimed at destabilising our nation,” Foreign Affairs Cabinet Secretary Alfred Mutua said on Wednesday.
The government also took issue with the Spokesperson of the Office of the United Nations Human Rights, who last week accused security forces of unnecessary or disproportionate use of force leading to the death of at least 23 people.
The opposition led by Raila Odinga, says they want the government to address the runaway cost of living while terming the government ‘illegitimate’.
On Wednesday, the Kenya Catholic Conference Bishops called on the Kenya Kwanza government to drop the Finance Act 2023 and instead seek revenue-raising measures that would not depress Kenyans.
“The social economic distress is real, we do realise that part of the disappointment and disillusionment of Kenyans that is leading to the agitation and anger is the severe economic distress,” said Nyeri Archbishop Anthony Muheria.
The opposition has also been on a countrywide signature–collection exercise aimed at stripping President William Ruto and his government of legitimacy.
Mr Odinga had termed the Saba Saba protest, which was held early this month as a success, vowing to lead a series of more protests across the country until the state lowers the cost of living.
But President Ruto has stayed put, warning that he will not allow anarchy to be fuelled by the opposition chiefs led by Mr Odinga, adding that he will not allow him to incite the youths against the State.