Kenya’s economy: damaged but defiant a year after Westgate attack

September 18, 2014 12:15 pm
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The World Bank cut Kenya's growth forecasts by 0.5 percent in June to 4.7 percent, citing both security concerns and the impact of poor rains/FILE
The World Bank cut Kenya’s growth forecasts by 0.5 percent in June to 4.7 percent, citing both security concerns and the impact of poor rains/FILE
NAIROBI, Kenya, Sept 18 – It was a symbol for Kenya’s growing well-heeled middle class: a vast supermarket crammed with flat screen televisions, imported wines, and chilled cabinets of cheese and meats.

But in a burst of grenades and gunfire one year ago, when Islamist gunmen prowled the food aisles executing at least 67 people in cold blood, the Nakumatt store in Nairobi’s Westgate mall would become the epicentre of one of the country’s most brutal massacres.

The attack, claimed by Somalia’s Al-Qaeda linked Shabaab, not only shattered the lives of many — it also heralded a tough year for Kenya’s economy.

“Three days after the terrorist attack we had no Nakumatt there, we had lost everything,” said Atul Shah, managing director of Nakumatt Holdings, East Africa’s biggest retail chain by outlet numbers.

Its outlet in Westgate, where three staff were killed, had been its flagship branch. Stock losses were estimated at $6.7 million dollars (5.2 million euros).

“Business was slow for a couple of months. Everybody avoided shopping malls or public places,” said Shah. He said the company has since started to recover, opening new stores.

Westgate itself remains closed. Large parts collapsed during the siege as a result of a huge explosion and fire.

– Tourism a ‘closed shop’ –

The World Bank cut Kenya’s growth forecasts by 0.5 percent in June to 4.7 percent, citing both security concerns and the impact of poor rains.

“More than anything, the Westgate attack struck at the ‘Africa-rising/Emerging Middle Class’ narrative — the cheerleaders of the economy,” Aly-Khan Satchu, a financial analyst in Nairobi, told AFP.

“These folks have moved from a very offensive game to one which is more defensive.”

Subsequent attacks, especially killings in the coastal region, have badly dented Kenya’s tourist industry — a key foreign currency earner and massive employer.

“The negative spillover has been felt most intensely in coastal tourism which is on its knees, and it’s unlikely to bounce back meaningfully in the next 12 months,” Satchu added.

Several Western nations urged their nationals to avoid the port city of Mombasa, the scene of a wave of shootings and bombings. One British travel firm evacuated hundreds of package tourists.

“Since the Westgate attack, we have had a myriad of challenges in the tourism sector, especially along the Kenyan coast,” said Mohamed Hersi, chief executive of Heritage Hotels and chairman of Kenya’s Coast Tourist Association.

The tourist board insists visitor arrivals dipped by less than five percent in the first four months of the year, but hotels and tourism operators reported a noticeable slump.

“We basically became a closed shop. We have had an almost 40 percent drop,” said Hersi.

– ‘Outstanding resilience’ –

In May, the United States said it was cutting staff at its Nairobi embassy, because of the mounting threat of jihadist attacks. US Peace Corps volunteers were pulled out in July.

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