The Barrel Blog

The elections in Kenya this week brought millions of voters despite pockets of violence that killed at least 15 people and rumblings of problems with electronic systems being used in the polls for the first time.

Uhuru Kenyatta, the son of the nation’s founding father, took an early lead Wednesday and nearly half of the votes over his main rival, Prime Minister Raila Odinga.

Some voters are weighing their concern about having Kenyatta as president as he faces charge by the International Criminal Court for inciting post-poll violence in the 2007-2008 elections. More than 1,000 people were killed in the violence which broke our after Odinga claimed he had been cheated of victory by supporters of President Mwai Kibaki, who is stepping down afer two terms in office. The post-elections violence paralyzed east Africa’s biggest economy and the schilling nose-dived against the US dollar.

The US has stated that there would be “consequences” if Kenyans elect Kenyatta as their president, while the European Union has also threatened the country with sanctions, which would inevitably dampen foreign investment in the country of 43 million people. Kenya is a vital regional hub for foreign aid and is increasingly an important partner in US counterterrorism efforts.

The elections also come at a time when the Kenyan economy is progressing well. The International Monetary Fund expects the economy to grow by 6% this year, from 5% in 2012, and remain east Africa’s economic heavyweight. But the big question is how to sustain the momentum.

Blog entry continues below…

Request a free trial of: Oilgram News
	Oilgram News brings fast-breaking global petroleum and gas news to your desktop every day. Our extensive global network of correspondents report on supply and demand trends, corporate news, government actions, exploration, technology, and much more.

Kenya is still vulnerable to shocks like rising oil prices. Oil is one of the country’s top imports, and the oil import bill alone rose from $2.7 billion in 2010 to $4.1 billion in 2011, further weakening Kenya’s fragile current account.

Significant gas discoveries along the coastlines of Mozambique and Tanzania has boosted interest in the country’s hydrocarbon potential, attracting large western energy companies. Some of the latest entrants include Total and Eni.

Two oil discoveries by Africa Oil and Tullow Oil in the Lokichar basin are in similar geological settings as finds also made by Tullow in Uganda,  raising the prospects the country will become an oil producer.

Kenya is making strides toward prioritizing infrastructure projects, particularly oil and gas pipeline in addition to revamping the road network and rail network. Emerging investment opportunities like the discovery oil will most likely hasten the development of infrastructure not only in the country but in the region. Tullow, Total and China National Offshore Oil Corp. could invest up to $5 billion building pipelines to develop a regional hub for transporting crude from Uganda to Kenya.

Chinese companies have already poured $2.4 billion into Kenya’s manufacturing and telecoms industry, and are eyeing further investments on improving Kenya’s infrastructure such as roads across the country.  With such major foreign investors scouring for investments, the Kenyan elections have taken a new international dimension and there is tremendous pressure on Kenyans to ensure smooth elections.

Kenyatta late this afternoon accused the UK pushing the electoral commission to included invalidated votes in the counting, making it harder for him to pull off a first round win. The tightening of the race bodes ill, it is unlikely that either side will be able to score a quick victory and it will not take much vote rigging to influence the outcome. The losing party is certain to contest the results. The risk of politically instigated violence, in other words, seems all but assured.

Tweet