Business Daily (Nairobi)
Albert Muriuki
3 January 2008
Efforts to push President Kibaki and his key rival, Raila Odinga, to the negotiating table to resolve the deadly political crisis that has engulfed the country continued to move at glacial pace as both parties hardened their positions.
Global rating agency Standard & Poors downgraded Kenya's sovereign credit rating and the International Crisis Group put the country into its baskets of high risk alert watchlist alongside Pakistan because of the deteriorating security situation.
Though Mr Odinga's Orange Democratic Movement (ODM) showed subtle signs of softening its position in preference for international mediation, President Kibaki has not budged with his key ministers terming the crisis an internal matter in interviews on the BBC.
But a cross-section of world leaders ranging from UK Prime minister Gordon Brown, US Secretary of State Condoleeza Rice and respected South African Archbishop Desmond Tutu pressed for dialogue to end the ethnic violence and the political crisis that has rocked the nation.
ODM pentagon member, Mr William Ruto, told a Press briefing yesterday that UK Prime Minister Gordon Brown had once again called the ODM leadership and proposed three people who should be mediators in the current stand off.
"He gave us the names of the current chairman of the African Union President John Kufuor of Ghana, former UN Secretary General Kofi Annan and the leader of the observer team Ahmed Tejan Kabba, the former president of Sierra Leone," said Mr Ruto.
Analysts welcomed the move to bring the disagreeing parties to the table, terming it the way out of the crisis.
"It is high time ODM and PNU sat down and negotiated a way out of the crisis," said James Gathii a Professor of International Commercial Law at Albany Law School in the US.
He however warned that getting a mediator might be harder than imagined, as both parties must settle on a preferred candidate.
"It is good that respected personalities have shown interest in helping mediate. That people like Desmond Tutu and President Kufuor are concerned about Kenya is a sign that the crisis is of international concern," he said and warned that Kenya's investment grade rating would be cut further if the current situation continued.
The International Crisis Group has put Kenya, alongside Pakistan, Chad, Kyrgyzstan, Nepal and Lebanon into its conflict risk alert watchlist.
Yesterday, Reuters news agency reported that Standard & Poor's had cut Kenya's long-term local currency credit rating and said if the violence that has ensued from a disputed election there is not resolved, the foreign currency credit rating could be lowered as well.
S&P lowered its long-term local currency rating to 'B+' from 'BB-' and put both the long-term foreign and local currency ratings on "CreditWatch with negative implications."
More than 300 people have died in an explosion of violence since President Kibaki's disputed re-election.
"If the political situation and its multiple social and economic ramifications do not improve over the course of the next month, a lowering of both the foreign and local currency ratings is likely," S&P sovereign credit analyst Remy Salters said in a statement.
Kenya's foreign currency credit rating is 'A', well into investment grade territory. It is on par with Moody's Investors Service, which has an 'A2' rating while Fitch Ratings has the country one notch higher at 'A+'.
"Mutual accusations of vote rigging by supporters of Mr Odinga and President Kibaki have paved the way for an intensification of violence and a rising death toll since the results, which favoured M. Kibaki by a narrow margin and led to his inauguration, were announced on December 30," the statement said.
"This will adversely affect Kenya being able to raise money from the international capital markets as it had planned by floating the sovereign bond last year," said Prof Gathii. Kenya plans to sell $300 million with Eurobonds to help pay for infrastructure spending.
The President of the East Africa Law Association, Mr Tom Ojienda, urged the two leaders to give the mediation a chance, since the uncertainty in the country would not only affect the economy of Kenya but of her neighbours.
"The two parties should urgently agree on a mediator so that the country does not lose the economic gains we have achieved in the recent past," he said adding: "There were reported shortages of petrol in Uganda because of the insecurity in Kenya, which shows how the current situation is bad for the general economy of the region," he said.
He told the Business Daily that he had written to the Presidents of Tanzania, Uganda, Rwanda and Burundi to move fast to help Kenya come to a peaceful agreement. The presidents of the three countries had not yet confirmed receipt but Mr Ojienda stated that he was confident that they would assist Kenya, "I just sent the letter a day ago so I am sure they will respond in due time," he said.
The ODM yesterday stated that while it had preferred Mr Annan as the mediator, they were comfortable with the preferred choice of Dr Rice.
Mr Ruto said Dr Rice had called the ODM leadership and stated that the US and the international community preferred President Kufuor as the mediator.
President Kibaki's Party of National Unity (PNU) has not stated whether it would agree to mediate with ODM. But Mr Amos Wako, the Attorney General, stated that a proper tally would assist in any mediation or negotiations or constructive dialogue entered into in arriving at legal, policy or political decisions.
Archbishop Tutu, who is in the country, yesterday had long discussions with the ODM leaders and told the press that he would try and contact President Kibaki.
More than 170 people have been killed in the violence following the announcement of the results of last year's General Election and more than 75,000 displaced.
The Electoral Commission of Kenya (ECK) announced that President Kibaki had won the elections with 4.5 million votes, against Mr Raila's 4.3 million, which ODM strongly refutes.
While the PNU had stated that only the Courts can deal with Mr Raila's grievances, the AG, yesterday stated that inspection of the votes could be done without a court order and without an election petition.
The AG also added that constructive dialogue was necessary in easing inflamed passion.
"It is of necessity that the PNU, ODM, ODM(K) and other parliamentary political parties enter into constructive dialogue for a political solution.
Such political decisions can include for example the formation by the president of a government of all parliamentary political parties anchored on an agreement to be made public," read a statement from the AG's office.
While seeming to agree with the AG, Prof Gathii noted that the anxiety that gripped the nation and resulted in an outpouring of rage would be avoided if Kibaki and Raila agreed to share power, rather than engage in a recount or retally.
"For example, President Kibaki could serve the first two and a half years and Raila the next two and a half. Such a compromise might avert the inevitable deadlock Parliament as constituted would experience.
This would be the best case scenario as the country's nerves are much too frayed, the voting public in many areas displaced and the Electoral Commission sitting in shame to contemplate another general election any time soon," he says.
According to the Red Cross, the situation is dire and a shortage of food could lead to mass starvation especially in poor areas.
Yesterday, few businesses opened and those that did were closed by 11 am for fear of violence and looting as ODM supporters engaged the Police as they tried gaining access into Uhuru Park for an intended rally called by Raila Odinga.
A spot check by the Business Daily showed that businesses such as Nakumatt Down Town, which normally operates 24 hours a day, opened for less than two hours, then hurriedly closed.
The Co-operative Bank of Kenya on Kimathi Street also opened its doors for less than three hours; the Safaricom Customer Care centre on the same street did not open for the day.
The Kenya Bankers Association Executive Director, Mr John Wanyela, reckons that the country is losing billions of shillings due to the stand off.
"I can not quantify the amount, but considering that the country is at a stand still, I can tell you that this country is losing billions of shillings due to the stand off," he told the Business Daily.
He supported any means that might bring peace to the country, urging the leaders to "be man enough" and embrace peace for the sake of the country.
"The leadership of this country knows where things went wrong, they have the capability to stop the mayhem and save this country the losses it is incurring," he said.
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