Experts: Insecurity threatens Kenya's economy
22 June 2014, 09:14
Nairobi - Although Kenya recorded one of the fastest growing economies in Sub-Saharan Africa, rising political tensions and a wave of insecurity have posed great challenges to the country's economic progress, experts have said.
Experts and industry executives who spoke to Xinhua on Friday warned that political rhetoric and insecurity could erode gains made in expanding prosperity among Kenyans.
"It is a fact that politics influences the economy and other facets of life. What is worrying for now is the amplification of rhetoric by the political class and its potential to disrupt business and service delivery," Bethwel Kinuthia, an economics Lecturer, University of Nairobi told Xinhua.
Both the opposition and the ruling coalition have for the last two weeks engaged in war of words over pressing national matters like insecurity, high cost of living and skewed appointments in the public service.
Opposition leader Raila Odinga has called for a national dialogue to find lasting solution to challenges facing the country such as insecurity, cost of living and corruption.
President Uhuru Kenyatta and his key lieutenants are leading from a different script by insisting that the country is not in a crises mode.
Opposition leaders have called for a series of public rallies citing disaffection on the manner in which the country is being run.
However, experts have cautioned that public rallies might not solve Kenya's political and economic challenges, urging the opposition to seek dialogue in order to strike a middle ground solution.
"The opposition has a legitimate mandate to play an oversight role to keep the ruling class in check. What the opposition leaders should focus on for now is a transparent and responsive stewardship from the Jubilee government," said Kinuthia.
He cautioned against divisive politics that might inflame the country as it undergoes a delicate transition phase.
So far, President Kenyatta and opposition leaders are yet to strike a compromise to defuse political tension in the country.
Kinuthia regretted that the current standoff threatens economic growth as wary investors hesitate to pump money into the Kenyan economy.
"No investor, local or foreign would bet their money in a country embroiled in political instability. A fragile political environment bodes ill for business and economic growth," Kinuthia told Xinhua.
The U.S. Embassy in Kenya has started relocating some of its staff from Kenya to other countries over terrorism threats that has so far seen some Western nations issue travel warnings to their nationals.
The U.S. State Department said in its revised travel advisory on Kenya said the embassy would also be cutting down on its footprints in Kenya in the wake of insecurity that saw at least 60 people killed and many others injured early this week in the coastal region.
"Based on the recent changes in Kenya's security situation, the Embassy is also relocating some staff to other countries," the State Department said in its advisory.
Kinuthia challenged the political class to tone down rhetoric and concentrate on delivering pledges they made to the electorate.
"The consequences of bad politics are grave and we should avoid actions that might drift this country to the 2007-08 period when incitement fuelled violence, deaths and destruction of property," Kinuthia said.
Kenya has maintained its enviable status as an epitome of stability and progress in a region best by conflicts and under- development.
Ngunyi said on national television that Kenyan politics have evolved but the rule of law and individual responsibility should remain a cardinal principal to deter balkanization.
Business executives and ordinary citizens expressed displeasure at the current standoff pitting the government against the opposition.
The Chair of Kenya National Chamber of Commerce and Industry, Kiprono Kittony in a published commentary warned that insecurity and rising political temperatures will impact negatively on the economy.
Industry and commerce are the drivers of economy and require an environment of stability, Kittony said, noting that heightened political activities threatens key sectors of the economy like tourism.
The recent Mpeketoni attack is the most deadly attack in Kenya since at least 67 people were killed during a siege at Nairobi's Westgate shopping centre last September.
Kenya's tourism also suffered a decline in the number of tourists arriving since September 2011 when the Somali militant group, the Al-Shabaab, carried out the kidnappings of tourists in the Lamu archipelago and the kidnapping of the Spanish volunteers.
The country has witnessed several hit-and-run grenade attacks in recent months in the capital, Nairobi, and in northern Kenya and Mombasa port city.
Kenyan authorities often blame such attacks on Al-Qaida- affiliated Al-Shabaab rebels from neighbouring Somalia.
Kenya's international tourist arrivals for 2013 declined by 15. 8 percent to 1.49 million from 1.78 million in 2012. The drop in foreign tourists is largely attributed to increased terrorist attacks that have hit the country.
Local investors support a political truce to calm down jitters that have eroded business confidence.
"Why do newspapers keep on flashing alarming headlines as if we are in a state of war? We need sobriety at this moment to enable Kenyans to conduct their normal activities without disruption," lamented a female trader, saying that public rallies will worsen an already fragile situation.
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