The news from Nairobi this morning is grisly. A British mother, searching for her son amid the chaos of Kenya's Ebola protests, discovered his body two days after his death. The government, predictably, has quelled the unrest with a heavy hand.
But as the City watches these events unfold, the question is not one of public health but of public finance. Ebola is a tragedy, but the real contagion here is the erosion of institutional credibility. When a government mishandles a crisis, it invites a capital flight that rivals any viral outbreak.
The Kenyan shilling has already felt the tremors. Investors do not like uncertainty, and a mother finding her son's body in a morgue two days late suggests a systemic failure of state capacity. This is the kind of headline that sends gilt yields higher.
The market is a ruthless accountant. It remembers every missed payment, every bureaucratic delay. The British mother's grief is a human tragedy.
The market's response will be a cold calculation of risk. Expect volatility in Kenyan debt. Expect a flight to quality.
And expect the fiscal hawks in Whitehall to take note. The cost of quelling protests is not just tear gas and rubber bullets. It is the premium investors demand for the privilege of lending to a state that cannot deliver a dead son to his mother in a timely fashion.
