Terrorist attack may stunt Kenya’s economic growth, and harm tourism revenue
theGRIO REPORT - There is overall optimism about Kenya’s future and its global economic growth. Uhuru Kenyatta, the current president of Kenya, believes Kenya will overcome this tragedy as it has done many times before...
The Westgate Mall located in the heart of Nairobi was a reflection of Kenya’s emerging commercial influence and regional market-based status. Now, after recent terrorist attacks at the mall that killed dozens, in its place is a damaged edifice, a trail of devastated lives and the possible destruction of the nation’s economic stability.
Kenya is known to be one of the success stories of Africa’s economic resurgence according to the International Monetary Fund. Just three years after the global financial crisis caused a sharp economic downturn, the country has rebounded and earned a reputation as one of the continent’s emerging economies.
The African Development Bank Group noted a moderate rate of economic growth for the nation of 4.4 to 5.2 percent each year from 2011 – 2012, with an expected 5.7 percent growth for this year alone.
Kenya: A nation of comebacks
It is too soon to determine how much of an impact the recent attack in Kenya’s capital will have on the country’s economic future. However, Kenya’s economy is no stranger to taking hits. Previous tragic incidents include the aftermath of the 2008 disputed presidential election in which thousands of Kenyans were killed, the 1998 U.S. embassy bombing in Nairobi, and the 2011 near-famine producing drought that affected over 10 million people in the region.
Antoinette M. Sayeh, Director of the African Department of the International Monetary Fund shared that despite the past few years of significant challenges, Kenya’s economic outlook has come a long way.
“[Kenya] has suffered from two consecutive droughts, significant social strife with the global economic downturn, economic slowdown, public debt was rising and Kenya’s reserves at the time were less than its peer countries in the region,” Sayeh stated. “Only three years later do we see a different landscape in Kenya. Growth is proceeding quite well, the economic outlook is quite good and financial inclusion has been accelerating.”
Terrorism creates weary travelers
Agriculture is the leading foreign exchange earner in Kenya, which grew the economy by 3.8 percent this year, more than twice its growth rate in 2011 according to the World Bank. Tourism still remains the second largest foreign exchange earner for the country with the Kenyan economy relying heavily on tourist funds for economic sustainability.
As the attack on the Westgate Mall has slowly come to a close, many American travelers have become weary about their upcoming plans to visit the East African, sub-Saharan country. Kenyan government officials are reassuring tourists that this is in fact an isolated incident and the country is still safe to visit.
In a recent statement, Phyllis Kandie, the Kenya government cabinet secretary, EAC Affairs, Commerce and Tourism, said: “ We wish to assure tourists that Kenya is peaceful and our security agencies are doing everything possible to ensure that every one is safe. Tour operators and travel agents have confirmed that tourism activities continue uninterrupted. The government has also scaled up security in other social places across the country.”
The British Foreign and Commonwealth office, however, has decided to offer an advisement to travelers against all but essential travel to certain parts of the country, including Nairobi.
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