Political Risk Analysis - Quick View: Election Re-Run Does Little To Improve Political Uncertainty - JAN 2018

The Latest: Early results from a re-run of Kenya's presidential election report an overwhelming victory for incumbent President Uhuru Kenyatta, who took 98.3% of votes from the 266 out of 291 constituencies that have declared an initial tally at the time of writing. While this marks a significant increase from the share of votes Kenyatta won in the annulled August vote, the result is undermined by a low turnout (less than 34%) and main opposition leader's decision to boycott the race.

Implications: While President Kenyatta will look to stabilise Kenyan politics as soon as possible after the country's Independent Electoral and Boundaries Commission announces the official results, this will likely prove difficult amid the ongoing tensions between opposing factions of the electorate. Ethnic divisions within the Kenyan population often surface during election years as rival politicians stir up pre-existing tensions in an attempt to mobilise their base. Clashes have already resulted in dozens of fatalities in the weeks surrounding the two votes. The likelihood of further instability over the next six months is reflected in our recent downward revisions to Kenya's score in our proprietary Short-Term Political Risk Index, to 45.4 out of 100, from a previous score of 51.7 in September.

What Next?: Kenya's political situation remains uncertain but further bouts of violence are highly likely in the months ahead. Raila Odinga, the opposition leader who boycotted the October 26 vote, has called for calm while simultaneously rejecting the legitimacy of the electoral process, fuelling unrest in opposition strongholds. We believe Odinga is likely looking to use this unrest as leverage to bring the Kenyatta government to the negotiating table and offer some kind of power-sharing agreement in an effort to restore peace. While the precedent set in 2008 suggests there is scope for this scenario, our core view is that this is unlikely to play out over the coming months. Violence has been relatively contained compared to what erupted in 2008 and animosity between the two leaders has escalated to a point that would make any deal surprising.

Uncertain Election Fallout Presents Key Political Risk
Kenya - Short-Term Political Risk Index, Scores Out Of 100
Source: BMI

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