BY BETTY MAINA
The harrowing events at Westgate played out across our screens like scenes from a terrible horror movie, touching our collective psyche as a country. This act of terrorism did not just affect the families of the victims and the wounded, but each one of us. And as much as we may want to forget it, they continue to haunt us as more details about the last moments of our loved ones and our fellow Kenyans emerge.
The trauma inflicted on us was not just of the psychological kind. It is also had financial and economic aspects. A number of optimistic analyses have been done that predict a quick comeback for the Kenyan economy.
If the performance of the Nairobi Securities Exchange (NSE) is anything to go by in the past one week, then these predictions are right. The stock market has been bullish and this augurs well for investor confidence and the government is still going ahead with its $1.5 billion eurobond as scheduled.
But think of the enormous sums of money that insurance firms will have to pay out. Or of the tourism sector which appears to be the one that will bear the brunt of this attack. The sectors contributes 12pc to our GDP and is likely to affect our foreign exchange flows since it brings in 21pc of all our foreign currency earnings though the resilience of this industry is very impressive given the comeback experienced after August 1998 and other later sporadic attacks. India’s tourism sector bounced back quite fast after the 2008 Mumbai attacks and no long term economic setbacks were experienced.
But there are other imperceptible implications that must now be thought of. For those in business, company goodwill is of the utmost importance and a business takes years to build this up. If Kenya continues to be a soft target for these attacks, we just might start getting a reputation for being Al Shabaab’s and Al Qaeda’s punch bag.
This is not good for our credibility as an investment location, if prospective investors begin to get the idea that we are a Bermuda Triangle for investments.
Security is a big factor of production and ranks high among factors that investors consider before investing in a country. Security is paramount and very basic and no incentive including tax breaks or free land will convince an investor to bring their money here if security is not assured. And as heroic as our security forces were, especially those soldiers who died in the line of duty, we have to face up to the harsh reality that our best may not have been good enough.
We may not be able to reverse the attacks, but certain aspects of its outcomes still remain under our control at this juncture. Of importance is the government’s response to the attacks and its ability to contain the situation once it begun. We have to get our act together and set up a terrorism response unit capable of detecting attacks way before they happen and of responding promptly and efficiently if push comes to shove.
This will be a sign that we have learned from this incidence and we are doing all we can to ensure that there will be no repeat of the same. Investors are going to be very demanding on this issue and especially big investors who are eyeing the manufacturing industry.
The security forces alone are not to blame. Corruption at our borders is the hand that let loose a Pandora’s Box of evils on us. How else did the terrorists get in through our borders undetected and set up shop at the mall? That being said, we have probably sung this lullaby until it has lulled us to sleep. Westgate was the wakeup call of the dire need to curb this menace.
One way will be through the government’s response to the looting of businesses in the mall. No one is coming forth with the names of the looters as of now. What we need to keep in mind is that people made serious investments in Westgate, which were lost not only due to terrorism but due to thieves. These individuals should be identified and dealt with a heavy hand. If the government does nothing to get hold of them, then we will be sending out the wrong signals to the business community and the industrial sector that do not bode well for future investments and for us as a nation.
Another way is through the fight against counterfeit goods. Links to trade in counterfeit goods are slowly being established and for some time now it has been a known fact, that organised crime, at least, is funded through the sale of fakes.
In Kenya, Sh70 billion is lost annually to counterfeits. Firms are estimated to lose up to 40pc of their market share, 50pc of revenue and 10pc of company reputation. The society at large loses 56pc in revenue and 32pc of jobs and income go down the drain due to this problem. The economic impact of these last figures does not bear thinking about.
Clamping down on corruption and counterfeits are long term solutions. Working on our preparedness to future terrorist attacks are short term solutions, but all this will depend on our memory. Let us not forget the events at Westgate, the horror, the loss so that we can learn from it so that we can be better prepared to fight back should another similar attack come. God forbid.
(The writer is the chief executive, Kenya Association of Manufacturers and can be reached on [email protected])