Nairobi, Kenya - The Kenyan economy is under serious threat following a
sustained spate of terrorist related explosions, the most recent of which
occurred in town weeks ago in the heart of the Nairobi Central Business
The situation could deteriorate further as intelligence allegedly from the
National Security Intelligence Service (NSIS) blacklisted a number of high
traffic shopping malls, bus stations and entertainment spots.
A number of foreign diplomatic missions with representation in Nairobi have
given travel advisories to their nationals in what could have far reaching
implications to the economy whose growth has since been revised from the
earlier 5 % to 4.5 % this financial year.
Last month, Planning, National Development and Vision 2030 Minister Wycliffe
Oparanya announced the expected economic growth would slow down from the 5%
project in January this year to between four and 4.5 % attributing the
situation to volatile oil prices and an unsteady Kenyan shilling.
"Kenyans will not be cowed into submission to terrorist activities keen on
interfering with their daily business. Our economy has been a major casualty
of these terrorist activities but we will fight them to the last man,"
declared Kenyan Prime Minister Raila Odinga at the scene of the Moi Avenue
explosion which claimed one and hundreds of injuries.
Most scaring is a statement circulated from Police Headquarters last week
pointing to intelligence reports that the Al-Shabaab was planning to bring
down a number of skyscrapers in Nairobi in the next couple of weeks.
In less than three months, Kenya has experienced no less than six blasts
associated with terrorist activities. The most affected areas have been
Nairobi which has suffered three of these blasts, Mombasa which has
experienced two major ones and border towns of Garissa, Wajir and Moyale.
The economic shocks following the tension in the country have reverberated
through the stock market which has registered a decline in activity over the
last couple of weeks. The Kenyan shilling has not been spared either,
falling to a low of Sh87.75 at close of business on Thursday last week. This
is from a high of Sh85 against the US dollar three weeks ago. Investors
prompted by the sharp fall in the local currency have resorted to panic
buying of dollars. The Kenyan shilling has depreciated more than 2.3 % in
the last week alone.
Ironically, Finance Minister Robinson Njeru Githae sought to allay fears of
the shilling going back to the infamous December lows of 115 against the
dollar saying that the fall was due to commercial banks paying dividends to
foreign invests, a hypothesis that was not bought by economic analysts.
Most traders in Nairobi remained apprehensive some even fearing to open
their shops following the Monday attack.
"We are no longer sure of our safety. You cannot differentiate a customer
from a terrorist. Most of us are servicing loans we took to start these
small businesses, but in one second, they are shelled to nothing," said Ms
Mary Mbogo, a beautician whose stall was among those brought down by the
Whereas Nairobi is Kenya's both political and economic capital, Mombasa is
the country's tourism hub and accounts to over 80 % of the East African
nation's tourism activities.
Tourist arrivals have dwindled since late last year when the Kenyan coast
was labeled 'unsafe' following a round of kidnappings by suspected Somali
Al-shabaab militiamen targeting tourists. At least two tourists were killed
while another two were rescued by Kenyan forces.
The threat of losing tourism revenues and the general sense of insecurity
among Kenyans prompted the Kenyan government to declare war against the
Al-shabaab, a situation that has seen Kenyan troops enter deep into Somalia
to battle the ragtag militia. The war is currently in its sixth month.
Following this incursion, Al-shabaab top organs have not minced words on
their intentions to hit Kenyan targets and kill civilians in retaliation to
what they call 'illegal occupation' of their territory by Kenyan forces. As
a result, grenade and bomb explosions have been waged against unsuspecting
civilians in all manner of locations.
In 2011, Kenya realized US$ 1 billion in tourism revenue.
The figure is however expected to shrink drastically in the wake of reduced
arrivals and the apprehension over the general elections scheduled for March
next year. Most visitors fear a repeat of the 2007/8 post-election violence
prompted by disputed election results.
It remains to be seen how much the impact of terrorism will affect the
Kenyan economy but security analysts says the battle is far from over.