Kenya: Supreme Court ruling steers NSE Markets to gain Sh42 billion in paper wealth

NAIROBI, Kenya - The investors at Nairobi Securities Exchange (NSE) gained Sh42.1 billion in paper wealth following the Supreme Court ruling that upheld Deputy President Dr. William Ruto’s victory.

This is the highest daily gain ever achieved at NSE since the August elections.

The same ruling by the Supreme Court in 2017 led to the stock market crashing and investors losing out on trading at NSE.

The market capitalization shot to Sh2.192 trillion from Friday’s close of Sh2.15 trillion, while Kenya’s Eurobond yields trended lower from 15.1 percent on Friday to 13.84 percent on the 10-year 2024 bond.

The seven judges of the Supreme court, led by Chief Justice Martha Koome, dismissed the cases in a unanimous decision stating that Dr. William Ruto and his running mate Rigathi Gachagua were validly elected in the August 9 General Election.

Chief Justice Koome, in her ruling, stated that “As a consequence, we declare the election of 1st respondent (Dr. Ruto) as President-elect to be valid under Article 140(3) of the Constitution. We are not persuaded that the technology deployed by IEBC failed the standard of Article 86(a) of the constitution on integrity, verifiability, security, and transparency, as alleged.”

The supreme court further said that a report by the Registrar of the court on scrutiny and recount of ballot boxes from 15 polling stations confirmed that the Forms 34A on the public portal and those issued to party agents, and those delivered to the National Tallying Centre at Bomas of Kenya tallied.

Kenya’s business community welcomed the ruling, which is expected to lift the economic status that has slowed activity in the country since the August 8 General election over the uncertainty of the court outcome. 

Over the years, Kenya has had a history of disputed polls weighing heavily on its economy. The ruling by the supreme court and the acceptance by both political players have demonstrated political maturity, which boosts investor confidence.

Economic experts projected that Kenya might dodge historical polls hangover to record a five percent growth, the highest in an election year since the return of the multi-party political system more than 30 years ago.

Expansion in Kenya’s economic activity has a history of slowing down in election years since the return of multi-party democracy.

Analysis of growth trends since 1992 shows the momentum in economic activities softened by 2.83 percent on average in election years and recovered by an average of 2.08 percent in the year after the election. 

The president-elect is taking over the country, facing a high inflation rate and a lack of jobs. His administration faces the uphill task of delivering poll promises on jobs, cost of living, economic reforms, infrastructure, and housing.

During his campaign, Dr. Ruto promised interest-free loans, multimillion-shilling stimulus programs, housing, infrastructure, agricultural reform, completion of stalled projects, as well as clearing of pending bills.

The bottom-up approach Dr. Ruto campaigned on aims for job creation and entailed funding smallholder agriculture and small business to the tune of Sh500 billion over his first term in office. 

Dr. Ruto added that “Bottom-up economics is about investing the limited capital available where it will create the most jobs at the bottom of the pyramid. What does it mean practically? It means a commitment to invest Sh500 billion over the next five years in smallholder agriculture and the informal sector,” President Ruto said.

This will be met by budgetary constraints on debt payments that take up over 63 percent of revenues and a bloated wage bill that consumes 50 percent of taxes.

The new president will also be taking over a government constrained by debt and wage bill problems under an International Monetary Fund program that has called for increased taxation and elimination of subsidies.

GAROWE ONLINE