Recent Terror Attack Has Slowed Down the Resurgence of Tourism in Kenya

Tourism is Kenya’s 2nd biggest source
of foreign income. But at present, the country’s tourism industry has been under the scanner due to the ruthless attack in 15 years by the Islamist militants.

Around 67 civilians along with security personnel were reported dead in the recent four-day raid by the militants associated with Al-Qaeda at an upmarket shopping complex in the capital, Nairobi. On Sept 21, around 15 gunmen belonging to Somali Islamist group, rushed into the mall, armed with automatic machine guns. After which, they started blindly shooting and throwing grenades as they moved into the building.

“Some of the images that have come out of this incident are really shocking and it is going to have a negative effect,” Shilan Shah, an economist at Capital Economics in London, said in a phone interview yesterday. “The long duration at which it went on, the live coverage, the brutality of the attack, all this is certainly going to affect the approach.”

After tea exports, tourism is the biggest foreign-currency earner in East Africa, as tourists visit Kenya for its rich wildlife reserves. The Masaai Mara Park of the country is an abode to uncountable wildebeest can be viewed in a yearly migration. Adding to the wildlife reserve is also the Indian Ocean beach resorts at Mombasa, which is the country’s 2nd largest city. According to statistics, the tourism sector records about 10% of gross domestic product, developing over $1 billion annually and driving around 1.8 million travellers.

Hotel Chains

With well established locals and foreigners working in Nairobi, the Westgate Mall attracts several tourists, organizing a weekly market providing African souvenirs and trendy coffee shops along with internet facilities. According to the reports, the victims of the attack included 57 Kenyans and citizens from France, Canada, South Africa, China and Ghana.

As to the e-mailed report on Oct. 2, by Charles Robertson, global chief economist at Renaissance Capital in London, following this incident there is certainly going to be decrease in tourism revenue by $160 million this year, restraining economic growth in the $41 billion economy to about 5%, contrasting to previous estimation of 5.6 %, said in an e-mailed report on Oct. 2.

Tourism Target

Tourism industry was already suffering from the approaching elections in March and also because of the fire at Kenya’s chief airport in Nairobi in August, holding back the international arrivals.

The attack came up at a time when Kenya’s government is planning to increase investment in roads and railways in order to improve economic growth.

Rebound

Even with the low in tourism, the economy remains flexible as investors looking for long-term investment have not been worried, as stated by Shah.

The country has shown its resilience in countering such situations even in the past.

The Kenyan shilling has strengthened itself to 1.8% against the dollar after the shopping mall attack and has reached its high to 86.25.

Eurobond Sale

“Right after the attack, we were worried but with time we are witnessing that the impact was not as big as we assumed,” Mohammed Hersi, chief executive officer of Nairobi-based Heritage Hotels Kenya, a chain of seven hotels and safari lodges, said in a phone interview yesterday.

On the other hand, the government is sticking to its plans that it made before the attack on shopping-mall to sell a debut Eurobond of about $1.5 billion by coming December after facing several delays since 2007.

Oil Production 

Nairobi, which registers for around 60% of country’s economic output, holds regional headquarters for companies involving Google Inc. and Toyota Motor Corp. The country may start exporting crude oil by 2016 with the initiation of pumping oil by next year.

Earlier, Al-Shabaab had warned Kenya of bad consequences after it had sent troops to Somalia in October 2011 to oust the militant group, backing its decision by blaming the group of Kenya kidnapping at least 4 foreigners and killing a British national at a luxury coastal resort.

“Terrorism is a global problem and it not just occurs in Kenya or other developing country,” Hersi said. “Until high commissions and embassies do not stop their citizens from visiting Kenya, it will

continue to receive visitors.”