Comment
0
Tweet
0
Print
RSS Feeds

Before attack, Kenya's economic future was bright

Monday - 9/23/2013, 12:50am  ET

KEN SWEET
AP Markets Writer

NEW YORK (AP) -- Nairobi's Westgate Shopping Mall, site of Saturday's mass shootings where 68 have been reported dead, might as well have been a mall in suburban America.

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 the sub-Saharan nation's status as a regional commercial hub and its growing economic fortunes.

Kenya's economy has seen steady growth since 2002, averaging between 4 and 5 percent per year, according to the World Bank. Kenya's economy briefly slowed down during the 2008 global economic downturn, but recovered quickly. The country's economy 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 IMF, in a Sept. 17 speech in Nairobi.

The country also has a growing technology sector, focused around Nairobi.

It is not clear how the attack in Nairobi will impact the country's economic prospects, at least in the near term. However, a significant percent of Kenya's economy relies on tourists, who travel thousands of miles to go on safari through Kenya's Great Rift Valley and other wildlife reserves. Approximately 1.8 million tourists visited Kenya in 2011, primarily from Europe and the United States, according to the Kenya National Bureau of Statistics. Tourism from China and India has also grown in recent years.

Previous political instabilities or terrorist attacks in the country have typically negatively impacted Kenya's travel industry. After a disputed presidential election in 2008, where 1,200 Kenyans died in ethnic clashes, tourism dropped by more than 30 percent, according to the country's National Bureau of Statistics. Similar drop-offs in tourism occurred following the 1998 U.S. embassy bombings in Nairobi.

Long term, the World Bank and other economic organizations say Kenya's economic prospects are good. A British oil company recently discovered significant oil deposits in Turkana County, located northeast of Nairobi. After decades of importing its energy needs, Kenya is on track to be an oil exporter starting 2016.

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 country's rural areas.


Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.