AN INVESTIGATION INTO THE IMPACT OF THE 2024 POLITICAL UNREST ON KENYA'S ECONOMIC STABILITY

CHAPTER ONE

INTRODUCTION

Background of the study

Kenya, a nation traditionally considered as the economic centre of East Africa, has had substantial political and economic difficulties throughout its history. In recent history, the 2024 political turmoil stands out as one of the most profound crises the country has seen.  The political milieu of Kenya has been moulded by a historical backdrop of colonialism, challenges after gaining independence, and repeated instances of election violence. Since achieving independence from Britain in 1963, the nation has had phases of both stability and upheaval. The post-election violence in 2007-2008 was notably severe, resulting in the deaths of more than 1,000 individuals and the forced relocation of hundreds of thousands (Human Rights Watch, 2018). This incident highlighted the profound ethnic disparities and the instability of Kenya's political landscape. The political turmoil of 2024 might be seen as a protracted extension of this longstanding trend of instability. Instigated by disagreements over voting procedures and administration, the turmoil has been marked by extensive demonstrations, confrontations between opposition supporters and government troops, and a total collapse of law and order in several regions of the nation. These incidents have caused significant disruptions to everyday life and placed more pressure on the already delicate political structure of the country. The economy of this country is among the biggest and most varied in Sub-Saharan Africa, including important industries like as agriculture, tourism, manufacturing, and services. Agriculture continues to be the dominant sector of the economy, employing almost 75% of the labour force and making a substantial contribution to the GDP (World Bank, 2023). The tourism industry, renowned for its ability to draw millions of tourists to Kenya's national parks and coastal sectors, also serves as a crucial generator of foreign currency and employment opportunities.  Nevertheless, the nation has encountered other economic obstacles, including as elevated poverty rates, disparities in income distribution, and dependence on foreign funding. Moreover, the COVID-19 pandemic intensified these difficulties, resulting in economic downturns and higher levels of debt (International Monetary Fund, 2021). Amidst Kenya's gradual recovery from the consequences of the epidemic, the emergence of political turmoil in 2024 posed a fresh challenge to the country's economic stability. Numerous studies have extensively examined the correlation between political stability and economic performance. The available data strongly indicates that political instability has a detrimental effect on economic growth and development (Alesina et al., 1996). The 2024 turmoil in Kenya has had both immediate and perhaps enduring impacts on distinct areas of the economy.

The agriculture industry has seen significant negative impacts, including considerable interruptions in farming operations, supply networks, and market accessibility. These factors have resulted in scarcities of food, escalated prices, and intensified food insecurity (FAO, 2024). The tourism sector, which is very responsive to perceptions of safety and stability, has also had negative impacts as foreign tourists cancel their vacations and local enterprises observe a decrease in their profits (UNWTO, 2024). Furthermore, the turmoil has resulted in substantial outflow of wealth, as both local and international investors have withdrawn their investments out of concerns about financial instability. These factors have resulted in a devaluation of the Kenyan shilling, heightened inflation, and an escalation in the cost of living for the general population (Central Bank of Kenya, 2024). The economic recession has been exacerbated by the implementation of economic sanctions by foreign organisations in reaction to human rights abuses during the turmoil, therefore placing further pressure on the country's financial standing. Given the severe impact of the 2024 political unrest on Kenya’s economy, there is an urgent need to investigate the impact of the 2024 political unrest on Kenya's economic stability.

1.2 Statement of the problem

The political turmoil in Kenya occurring in 2024 has generated considerable apprehension about its repercussions on the country's economic stability. Economic operations are often disrupted by political instability, resulting in diminished investor confidence, impeded development, and heightened poverty rates (Alesina et al., 2016). In the case of Kenya, the turmoil has materialised via extensive demonstrations, disturbances in vital industries such as agriculture and tourism, and disruptions in trade routes, all of which are vital to the country's economic integrity. Furthermore, the turmoil has resulted in a decrease in foreign direct investment (FDI) and has placed significant pressure on the national budget, as the government has had to reallocate resources to handle the crisis (World Bank, 2024). Furthermore, the economic sanctions enforced by different international organisations in reaction to human rights abuses have worsened the situation, further complicating Kenya's efforts to sustain its economic stability. Hence, the study investigate the impact of the 2024 political unrest on Kenya's economic stability.

1.3 Objective of the study

The broad objective of the study is to investigate the impact of the 2024 political unrest on Kenya's economic stability. The specific objectives is as follows

To examine the effects of the 2024 political unrest on Kenya's employment rates levels.

To assess the impact of the political unrest on Kenya's trade balance and international trade relations

To investigate the role of government policies in mitigating the economic consequences of the political unrest.

To proffer recommendations aimed at enhancing Kenya's economic resilience in the face of future political unrest.

1.4 Research questions

The following questions have been prepared to guide the study

What is the effects of the 2024 political unrest on Kenya's employment rates levels?

What is the impact of the political unrest on Kenya's trade balance and international trade relations?

What are the role of government policies in mitigating the economic consequences of the political unrest?

What are the proffered recommendations aimed at enhancing Kenya's economic resilience in the face of future political unrest?

1.5 Significance of the study

The study will be significant to policymakers and government officials as it will provides crucial insights into the economic consequences of political unrest, it will also reveal the specific ways in which instability has affected various sectors of the economy, they can formulate more effective policies aimed at mitigating the negative impacts of future political crises. Additionally, the findings can inform strategies to strengthen Kenya's economic resilience, ensuring that the country can better withstand similar challenges in the future. The study will be significant to the academic community as it will contribute to the existing literature, add to library resources and serve as a guide to future researchers.

1.6 Scope of the study

The study focus on the impact of the 2024 political unrest on Kenya's economic stability. Empirically, the study will examine the effects of the 2024 political unrest on Kenya's employment rates levels, assess the impact of the political unrest on Kenya's trade balance and international trade relations, investigate the role of government policies in mitigating the economic consequences of the political unrest and proffer recommendations aimed at enhancing Kenya's economic resilience in the face of future political unrest.

1.7 Limitation of the study

Like in every human endeavour, the researchers encountered slight constraints while carrying out the study. The significant constraints are: 

Time: The researcher encountered time constraint as the researcher had to carry out this research alongside other academic activities such as attending lectures and other educational activities required of her.

Finance: The researcher incurred more financial expenses in carrying out this study such as typesetting, printing, sourcing for relevant materials, literature, or information and in the data collection process.

Availability of Materials: The researcher encountered challenges in sourcing for literature in this study. The scarcity of literature on the subject due to the nature of the discourse was a limitation to this study.

1.8 Definition of terms

Political Unrest: A situation characterized by widespread public dissatisfaction, protests, strikes, and sometimes violence, often triggered by political grievances such as disputed elections, corruption, or governance issues. In this study, political unrest specifically refers to the events that occurred in Kenya in 2024.

Economic Stability: The condition in which an economy experiences steady growth, low inflation, low unemployment, and predictable financial conditions. Economic stability allows for sustained development and prosperity, minimizing the risk of economic crises.

Gross Domestic Product (GDP): The total monetary value of all goods and services produced within a country's borders in a specific time period. GDP is commonly used as an indicator of the economic health and growth of a nation.

Foreign Direct Investment (FDI): Investments made by individuals, companies, or governments from one country into businesses or assets in another country. FDI typically involves significant ownership or control over the foreign company or asset.

Investor Confidence: The trust and positive expectations investors have regarding the stability and profitability of an economy or financial market. High investor confidence often leads to increased investment and economic growth, while low confidence can result in capital flight.

Inflation: The rate at which the general level of prices for goods and services rises, leading to a decrease in purchasing power. Inflation can be influenced by various factors, including economic policies, supply and demand imbalances, and political instability.

Trade Balance: The difference between a country's exports and imports of goods and services. A positive trade balance (surplus) occurs when exports exceed imports, while a negative trade balance (deficit) occurs when imports exceed exports.