A look at the financial record of the former regime, the high office has a lot to do with which directions the market takes. In 1992, Stuart Armitage of Enke Kenya limited, an expert in the Kenya financial market, predicted that by the year 2000, Kenya would be at a critical state of bankruptcy and that it would take over 20 years to recover. His prediction turned out to be true. By the year 2000, Kenyan financial market was at negative digits and the government exchequer had no money in the reserves. The IMF and the World Bank had listed the country as gravely mismanaged and the country was in a state of bankruptcy. In fact former finance minister in Moi’s government Mr. Simon Nyachae declared the country bankrupt resulting in his sacking.

It is therefore important to note that though the people are un-aware of the implications of their vote, they will be deciding whether Kenyan financial market continue to grow or go the way of Kenyan traditional culture. Even the road construction is related to the political system given the relationship between the drafters of the policy, the politicians, and the implement of the policies, the permanent secretaries. To imagine therefore that the country is and can function outside of the political process is to ignore the historical development of the Kenyan Parliamentary system.

It is therefore interesting to listen to some of the major players in the Kenyan financial market. KEN had a meeting with the big whit’s of the Equity Bank at their head quarters in NHIF building in Nairobi. If one needs to know the state of Kenya’s economic growth one need to look at the financial power of the common man. Equity has the largest share of the common man’s banking interest and it is the fastest growing bank from about 0.1 (in millions) to above 1billion in 2007, a growth of over 100 per cent.  The majority of its customers are the lower and middle class citizens representing a customer base of 1.8 million. Given that the major growth happened between 2002 and 2007 it was surprising for the CEO of Equity, Mr. James Mwangi, to present the Kenyan financial market as independent of the Kenyan political climate. Although equity experienced marginal growth between the year 1994 to 2002 accounting to about 5% growth, the years between 2002 and the year 2007 have seen a growth of over 100%. Yet according to Mr. Mwangi, “The new government reforms have minimized the interference of the government within the financial sector.” Mr. Mwangi told KEN. “We are in a new political era and the strengthened central bank oversight has reduced the corruption nature of Kenyan financial institutions.”

One has no alternative but admire Equity’s Chief executive Officer for unwavering optimism, however history has shown that Africa’s political establishments have much to do with its financial market. Even the United States markets do get affected by the political climate. The appointment of the federal reserve chairman by any US  president does affect the markets and the financial institutions. “African government reforms are resulting in stronger economic institutions” Mr. Mwangi told KEN, this as Zimbambwe collapses under the political foolishness of its president Robert Mugabe. It is good and refreshing to sit down with an optimistic financial guru like James Mwangi. There are too many prophets of doom sounding the horn for the collapse of African financial markets and Mr. Mwangi’s optimism does deserve credit and maybe the reason why Equity’s profit margin grew from 218million Ksh. to over 1billion Ksh.  between 2004 and 2006, after he took over as Equity’s CEO.
However the historical development of financial markets world wide tell us that politics matter when it comes to financial markets in any country. Mr. Mwangi does not believe that history. “The presidential elections in Kenya are not my concern.

It is my belief that Equity as a financial institution will survive whether it is Kibaki, Kalonzo or Raila who is elected president.”  The people will go to the polls on December 27th, but whether Mr. Mwangi is right or wrong will depend upon who is elected president and our conversation with him one year later. If it is Kibaki, we should expect that Equity and the Kenyan financial institutions and markets will continue to grow given his performance in the last 5 years. But what happens to the market if either Kalonzo or Raila is elected will be KEN’s future news.

article by Phillip Gitonga, Sharon Childers, Dr. Kamau, Dr. James Mwangi and Equitys’ board chairman Mr. Peter Munga