For investors, Mwai Kibaki’s transformative insights into capital markets between 2002 and 2013 will surely outlive him.
President Kibaki was many things to different people, but an admirable economist to almost everyone.
He leaves the stage at a time when every current economic problem has foes and friends asking in unison: What would Kibaki do?
A career civil servant, Kibaki took office in 2002 when the economy was almost at a standstill, having recorded growth of 0.5% that year.
The economy had created an additional 26,552 jobs in the formal sector and foreign direct investment in Kenya amounted to $27.62 million (3.2 billion shillings).
But it is his five-year economic recovery for wealth and job creation, rolled out in 2003, that will burn him into the hearts of many Kenyans and investors.
The strategy aimed to create at least half a million jobs a year, reduce the poverty rate by at least five percent, reduce inflation to less than five percent and grow the economy of at least seven percent.
His magic wand? Find a way to get into the hearts of investors so that they invest more and grow their businesses, and in the end employ more people and share the profits with the locals.
He needed to see businesses grow and create new ones in order to increase the size of the national pie. This required investors to open their wallets.
And it wasn’t long before green shoots began to emerge.
Foreign direct investment inflows, for example, reached $1.1 billion (127 billion shillings) by the end of his first term.
His ideas had impressed deep-pocketed investors as much as he had impressed ordinary Kenyans.
To date, the best years for many companies remain 2012, Kibaki’s last full year in power before handing over power to Uhuru Kenyatta the following year.
Its accelerated infrastructure spending quickly opened up once sleepy areas, helping locals appreciate the process of wealth creation.
The Micro, Small and Medium Enterprises Act 2013, for example, was introduced to help small businesses grow and contribute to economic growth.
It was under his leadership that the financial services industry was revolutionized to enable M-Pesa, a technology that continues to impress Kenyans and the world in equal measure.
Another feather in Kibakis’ cap was reflected in the capital markets which, after years of sluggish activity, have suddenly become a place where investors can invest and make a return.
The Nairobi Securities Exchange (NSE) had endured years of stagnation until the winds of change blew from the Kibaki administration onto the trading desks.
The NSE 20 Share Index, which tracks the performance of the top 20 counters, rose from 1,384 points in January 2003 to 6,161 points in early January 2007.
This meant investors were reaping returns in the capital markets, a trend that would encourage more retail investors to join.
In November 2004, equity clearing and settlement was automated, marking one of the Nairobi Stock Exchange’s defining moments.
Increased interest in the NSE will prompt the Kibaki administration in 2008 to introduce regulations that will extend trading hours from just three to six.
It was under his leadership that the NSE also experienced an IPO boom, notably with the IPO of Kenya Electricity Generating Company and Safaricom in 2006 and 2008 respectively.
Other Kibaki-era listings included Scan Group, Eveready, Access Kenya, Kenya Re, Cooperative Bank, Britam, Mumias Sugar, TransCentury and East African Cables.
Safaricom and Co-op Bank became one of the top five companies by market value, highlighting the quality of IPOs under Mr Kibaki’s administration.
The introduction of the Growth Enterprises (Gems) market segment in 2013 as a segment for small and medium-sized enterprises to enroll in the NSE under flexible requirements was another demonstration of Kibaki’s belief in an economy for all.
The past nine years have seen the NSE endure an IPO drought for all high profile companies, although some existing companies such as Eveready, Mumias, Kenya Airways, Uchumi and TransCentury are struggling to keep their lights on.
NSE’s revenue from annual registration fees fell, hitting a six-year low of 76.06 million shillings in 2020.