Westgate attack bad news for Kenya's economy
23 September 2013, 11:17
New York - The Westgate Shopping Mall, site of Saturday's mass shootings where 68 people have been reported killed, might as well have been a mall in the U.S. or Europe.
Kenyan consumers could buy shoes from brands such as Nike, Adidas or Converse, or visit Samsung's store and buy a new smartphone. When hungry, a shopper could buy frozen yogurt or sit down for sushi.
Before it became the site of Saturday's mass killings, the five-story Westgate mall highlighted Kenya's status as a regional commercial hub and its growing economic fortunes.
The economy has seen steady growth since 2002, averaging between 4 and 5 percent per year, according to the World Bank. The economy briefly slowed down during the 2008 global economic downturn, but recovered quickly. It is expected to grow nearly 6 percent this year, according to the International Monetary Fund, and the Nairobi Stock Exchange is up 21 percent in the last 12 months.
"Kenya's economic gains over the past few years are impressive, particularly coming as they have in a context of global weakness and uncertainty," said Antoinette Sayeh, director of the African division of the International Monetary Fund, in a Sept. 17 speech in Nairobi.
The country also has a growing technology sector, focused around Nairobi.
It is not clear how the Westgate mall attack will impact Kenya's economic prospects, at least in the near term. However, a significant percent of the country's economy relies on tourists, who travel thousands of miles to go on safari through the Great Rift Valley and other wildlife reserves.
Approximately 1.8 million tourists visited the country in 2011, primarily from Europe and the United States, according to the National Bureau of Statistics. Tourism from China and India has also grown in recent years.
Previous political instability or terrorist attacks ihave typically negatively impacted Kenya's travel industry. After the disputed presidential election in 2008 tourism dropped by more than 30 percent, according to the National Bureau of Statistics. Similar drop-offs in tourism occurred following the 1998 U.S. embassy bombing in Nairobi.
Long term, the World Bank and other economic organizations say the country's economic prospects are good. After decades of importing its energy needs, Kenya is on track to be an oil exporter starting in 2016, following the recent oil discovery in Turkana.
While there has been significant progress, Kenya is still considered a low-income developing economy. Roughly four out of 10 Kenyans live in poverty, according to the World Bank, mostly in the rural areas.
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