Kenyan economy strained by terrorist attacks - CNBC Africa

Kenyan economy strained by terrorist attacks

East Africa

by Trust Matsilele 0

Al shabab, has claimed responsibility for a series of attacks in Kenya. PHOTO: Reuters

“The real problem is the escalation in the nature and form of the attacks. The attacks are sophisticated and will surely prompt an increase in costs of security in the country,” Robert Bunyi, chief executive officer of Mavuno Capital told CNBC Africa.  

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“Kenya has always been in a vulnerable position. We have always been a neighbour to a country that was in a civil war for over 20 years, so it was to be expected that a natural evolution would eventually lead to a spill over to neighbouring country.”

“It started with proliferation of small arms into the country and increasingly a number of raids started to be encountered at the border regions precipitating the entry of the Kenyan military into Somalia which resulted in a backlash from terror groups,” he added.

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The two attacks experienced over the weekend in the coastal city and two simultaneous attacks on public transport indicate the magnitude and frequency of attacks in East Africa’s economic hub.

Analysts predict that perceptions on security will affect decisions of investors who are yet to come into the country.

There have been eight separate attacks believed to be initiated by terrorists from last September.

In 2013, terrorists brought business to a halt at the Westgate mall killing over 60 people in a series of attacks.

(READ MORE: Westgate mall terror attack expected to market market)

The United States has warned its citizens to avoid travelling to the coastal city of Mombasa following the weekend attacks, posing a danger to the country’s tourism sector.

President Uhuru Kenyatta is reported to have said the country’s tourism sector was on its knees due to the recent attacks.

Kenya’s  travel and tourism contribution to the country’s gross domestic product (GDP) is estimated to be above five per cent of the total GDP and was forecasted to rise by 3.4 per cent per annum, from 2012-2022.

BY TRUST MATSILELE

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