Moody’s Investors Service has predicted that Kenya’s economy will lose between $200 million and $250 million in tourism revenues this year, in the wake of the horrific shooting that took place a few days ago in a shopping mall in the country’s capital, Nairobi.
Tourism generates between 12% and 14% of Kenya’s GDP, and so the projected loss of revenue will no doubt create a dent in the country’s economic growth. Yet inside Kenya, the spirit is strong despite the shocking events of the past days, and the feeling of solidarity among Kenyans – young, old, rural, urban, rich and poor – has infused the country with a sense of great optimism and a will to carry on.
In a country marked by sharp ethnic divides and deep religious and tribal tension, where security is a day-to-day concern, “politicians from all sides came together to give public statements,” said Amolo Ng’weno, managing director at Digital Data Divide (DDD), a data services company in Nairobi. “We all feel that not only are we one people under threat, we are also one people working together to overcome this tragedy.”
The challenge now, Ng’weno said, will be to “harness this feeling over the longer term,” and to ensure that it can carry Kenya forward.
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Investors such as Peter Thomas, founder and portfolio manager of Africa Capital Group, an investment firm focused exclusively on Africa, believe that there is a good chance that the positivity will carry forward and that the shooting will contribute towards the creation of a stronger, more unified and more peaceful Kenya.
“It’s never a good thing for a country to waste energy and resources fighting itself, and after this horrific and tragic event, there’s a certain solidarity among people that could potentially translate into more effective governance and a more positive future for Kenya,” Thomas said.
Among the many African nations, Kenya holds a special interest for investors such as Thomas, who set up African Capital Group to serve the growing interest in the continent from U.S. investors. Thomas, who formerly served as co-portfolio manager of the PIMCO Growth & Income Fund, spent several years in Ethiopia when his father, a U.S. diplomat, was posted there, and was so marked by the experience that Africa became his lifelong interest.
East Africa in general is the part of the continent that attracts the most investor interest and Kenya’s economy has been growing by 5.5% to 6%, Thomas said, adding he doesn’t believe the mall shootout will derail the country’s long-term growth story.
“Kenya is a young country with half the people are under the age of 24 and it is also a fairly wired country in terms of telecommunications, and two out of every three people have a cell phone,” he said. “People there are anxious and eager for a better economy, and I don’t think these attacks can directly impact the areas of greatest growth such as telecommunications and financials.”