When violence flares up in Kenya, like what happened on Monday, Ugandans take instant notice.
Fifteen years down the road, some are still counting their losses in cargo and trucks despite a 2018 Kenya High Court order to the Kenya government to compensate them in the aftermath of the 2007 election protests.
Besides being Uganda’s main transit route to the coast, Kenya is one of Uganda’s leading trading partners and the East African Community’s biggest economy.
When Kenyans angrily pour onto the streets, anxious Ugandan business people pore over all available news channels to monitor the situation. Trade finance has become an increasingly important factor for Ugandans to participate in international trade, but any uncertainty locks up cash and doesn’t please their bankers.
Their imported goods, industrial inputs as well as most of our exports pass through Kenya. Reliability is the difference between having customers and no customers at all and disruptions in the transport corridor are always a cause for worry. It means added costs and delays which can adversely affect production and for the Uganda government, a drop in tax revenues.
Authorities at the Busia border post saw a sharp reduction in transit traffic due to the fact that the trucks connect through Kisumu, which turned out to be hotbed of the violence.
Malaba, which clears about 1000 trucks daily also recorded reduced traffic with drivers taking the precaution to park along the highway rather than risk being ambushed, especially Ugandan registered vehicles.
In the meantime, the usual influx of Kenyan fruit and produce buyers was a relative trickle on Monday, even as other informal cross-border trading activities were substantially diminished.
According to Bank of Uganda figures, between December 2021 and November 2022, Kenyans bought just over $500 million in merchandise from Uganda or put another way about UGX 4 billion on a daily basis.
From the minute, it was announced that William Ruto would be Kenya’s fifth president following the fiercely contested August 2022 elections, Raila Odinga told all who cared to listen, that he was robbed.
Since then, ‘Baba,’ as he is fondly called by ardent supporters of his Azimio la Umoja coalition party, has woven this sense of electoral betrayal into the wider public complaint about the rising cost of living.
As a show of mass opposition against Ruto’s government, the Monday Maandamano (protests) largely failed to live up to earlier top billing. Due to the massive police presence, the closest that Raila came to delivering an official letter of their grievances at State House, was the threat itself.
The majority of Kenyans either stayed home or tried to ignore the protestors as best as they could. Instead, the whole thing ended up in a series of running battles with police firing water cannon, lobbing tear gas canisters, numerous arrests and scuffles, sporadic looting, some property damage and other acts of vandalism.
If there were any gains, then the best that could be said is that several thousand Azimiola Umoja supporters allowed themselves to let off some steam in parts of the Nairobi CBD and the large settlement of Kibera, but as a whole the Kenya economy took a hit.
Like several African countries, Kenya is now firmly caught in the grip of crippling foreign debt servicing payments, high inflation and a depreciating nation currency against the United States dollar. Some 21 countries in Africa are in, or at risk of, debt distress.
These circumstances have created a worsening cost of living crisis and a grumbling citizenry. The one thing Kenya cannot afford is disrupting economic output.
Appealing for calm, Deputy President Rigathi Gachagua said, “Kenyans should ignore being incited into violence and destruction of properties. As it is, a number of businesspeople did not open shops due to fear of looters threatening businesses. So far, the country has lost two billion (shillings) today from these protests across the country.”
But a few hours later Raila told his followers, “We have started a war. Every Monday, we will be protesting.”
This raises uneasiness among Ugandans and puts pressure on Ruto to find a solution unless Kenya is to adopt a four-day working week.
Once again, Ugandans will flirt with the option of using the Central Transport Corridor through Tanzania. But the fact remains, until their SGR is completed up to Mwanza, this option is still not cost effective. Ugandan business people need not panic right now, but should pay closer attention to their logistics.
Six months ago, Ruto triumphantly declared that he would not repeat the handshake policy that allowed his predecessor Uhuru Kenyatta to appease Raila. Ruto prides himself on being accommodative but insists Kenyan law is on his side—not Raila.
However the proposed regular Monday protests are a clear shakedown to his administration and likely to force him into some kind compromise because the business community will not stand for this state of affairs. Apart from the fear of an escalation, there is simply too much at stake for East Africa’s financial and transportation hub.
On other hand, jobs are hard to come by. Playing for time may suit Ruto and steadily lower the enthusiasm of the demonstrators.
After all, during this challenging economic interlude, who in their right mind is going to risk losing employment to participate in protests that disrupt the very business operations that eventually pay his or her salary?
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