Economic loss beyond estimates
Without doubt, every guesstimate proffered relating to the social and economic mayhem and damage wrought on our poor country over the past few weeks, is an underestimate.
Two things clearly stand out. The fallout is so diverse, deep and ongoing that at this juncture, all one can say is that it is gargantuan, unquantifiable and compounding.
The second is that the robust economic restoration and progress witnessed in the past few years has been systematically halted and in some cases, wrecked in a mere three weeks. As things stand, the performance of and confidence in our economy has regressed to those dark old days of the last decade of the Moi era. It is indeed ironic that President Kibaki both presided over its greatly improved performance and its hasty downturn.
It is important to point out that even if a semblance of social harmony and order resumes, hand in hand with a return of reasonable commercial and economic activity, much damage has been inflicted and will result in a high price. What is taking place now is a move from short term damage, which is often easier to recover from, to one of harder, medium term decisions.
These range from whether to hold back on investment and loans, to deciding whether to include, or exclude, Kenya from much of the tourist circuit.
It is useful to point out that whilst the Kenyan economy was performing strongly and confidence was high prior to the election fallout, there were some grey clouds on the horizon that were going to impact on performance this year. First, the last rains were deficient in several parts and around 70 per cent of the crop planted failed. This will put additional pressure on food prices, especially in those areas.
Furthermore, any handbrake put on agricultural activity feeds through to reduced overall economic performance.
Secondly, the world is experiencing some massive price shocks in oil and basic foods, which impact heavily and negatively on all, Kenya included. The price of oil is knocking at the door of $100 a barrel and the price of wheat has risen by 80 per cent in the past year.
BEARING IN MIND KENYA IMPORTS all of the former and much of the latter, as well as a number of other foodstuffs, it is not difficult why the cost of living is roaring ahead. Third, the US economy is in a downturn with resultant negative ramifications for the rest of the world.
So, factors beyond our control were likely to shave off a couple of percentage points of our growth even before the mayhem. We would have done well to have got through this year with a growth rate of 5 per cent plus, without the self inflicted damage.
That has now all changed and a good example of the short and medium term self-inflicted damage is to look at our tourism industry. In the past three years the Kenyan tourist industry had started to take off. We have moved from a plateau of half a million international arrivals to over a million. It has roared ahead of tea and horticulture exports, to become Kenya’s largest foreign exchange earner.
I used the words “started to take off” deliberately because Kenya’s share of the world tourism cake, in relation to its potential, is minimal. The prospect of two million international visitors within three years was a very real one.
Today, Kenya tourism is dead in the water. Cancellations now extend to mid year and Kenya is fast being taken off the world tourism radar screen so that the next two high seasons are likely to be sluggish, to say the least.
Tourism is just one of many examples. There is damage inflicted on all sectors and sub-sectors of the economy. Then there is the loss of confidence that accompanies such damage.
However, the fundamentals of Kenya’s economy are good. It is resilient and will pick up. But the damage is extensive and it will take time and much dedication.
Quelles sont les conséquences économiques pour le Kenya?
Le tourisme, un des secteurs moteurs de l’économie du pays, qui emploie 250 000 personnes, a subi des pertes sévères, des centaines de ressortissants étrangers ayant été évacués du pays par les tour opérateurs, dont les activités sont quasiment paralysées. Les pertes du secteur hôtelier sont estimées à près de 40 millions d’euros pour la période qui va jusqu’à la mi-janvier. Grâce au port de Mombasa, le Kenya est un carrefour pour l’approvisionnement de toute la région, et la destruction de portions du chemin de fer et de la route de l’ouest, bloquée par des barrages de miliciens, a provoqué des graves problèmes de ravitaillement notamment en Ouganda, au Burundi et au Rwanda. Rien que pour le mois de janvier, l’activité industrielle a baissé de 35% et risque de provoquer le licenciement de 400 000 employés d’ici le mois de mai. Les secteurs du thé et des fleurs (le Kenya fournit un quart de l’importation florale de l’Europe) ont subi également une forte baisse de leur activité, basée essentiellement dans la vallée du Rift.
STATEMENT BY KENYA TOURISM INDUSTRY
rebuilding the industry after the slump of 1997
• Kenya's tourism stakeholders have worked tirelessly over the last seven years to rebuild the industry after the slump of 1997, earning the country Kshs 65.4 Billion in 2007.
• Tourism is now Kenya s leading source of foreign exchange, directly employing over 250,000 people while supporting an estimated 3 million people indirectly
• Tourism has a huge impact on all aspects of the national economy, especially agriculture, transport and communication, aviation, oil companies, breweries, manufacturers, technology firms, insurance companies, advertising agencies, construction firms, artisans, handicraft makers, community projects, the small business and informal sector amongst many others.
• Tourism generates approximately Kshs 20 Billion in tax revenue for the Government each year.
• A big percentage of tourist bookings for the first half of the 2008 have been lost.
Those for the rest of the year hang in the balance awaiting the outcome of political developments.
An average of Kshs 5.5 Billion in revenue is expected to be lost every month.
• The view that the current economic crisis can be readily and quickly overcome is erroneous.
Tourism recovery is a long and expensive process that needs a supportive and pro-active leadership willing to achieve this.
WHY SHOULD THE ABOVE CONCERN THE KENYANS ?
There may be a temptation to view the above issues as "a tourism industry problem" but the truth of the matter is that it is all Kenyans irrespective of their political affiliation who will suffer because:- -
• Hotels and lodges are recording very low occupancies and some are almost empty.
There are also, very few visitors to the National Parks and Reserves.
As a result, 120,000 people face imminent unemployment and their families will be plunged into poverty regardless of how they voted.
• There will be a ripple effect hitting suppliers in agriculture, industry and other supporting sectors.
These sectors will suffer loss of businesses and jobs. Airlines are also recording losses as tourists fail to come to Kenya.
• The tourism informal sector supports an estimated 250,000 jobs in several areas such as handicrafts, transport, supplies etc.
A vast majority of these workers (especially at the Coast) stand to suffer immediately regardless of how they voted.
• Several Government projects are supported (directly or indirectly) by revenues derived from tourism.
The viability of such projects may well be affected.
• Several Local Authorities areas (e.g. Narok, Trans Mara, lsiolo, and Samburu) are almost entirely dependent on tourism.
The livelihood and incomes of persons resident in these areas are at risk.
Kenya's reputation as a leading tourist destination is being damaged in the global marketplace with our competitors taking away our prospective clients.
Do our leaders care?
OUR MESSAGE TO KENYANS :
Our Honourable Members of Parliament have shown us the way.
Despite their differences, when they met in Parliament they did not engage in demonstrations and violence.
They observed the rules of the House and in so doing have now secured their salaries and by extension, their livelihoods.
Why do you want to destroy yours?
Shun violence and hooliganism ... Give dialogue a chance... You can make a difference.
To Politicians:
• There are more Kenyans trying to get to work and earn their living than there are those trying to demonstrate on the streets.
Let us separate the political problems currently being experienced from the right of all Kenyans (of whatever political persuasion) to earn a decent living.
• Every day that the political impasse continues is another deathblow to the economy.
While negotiations continue to falter and the disagreements spill over into our streets with calls for demonstrations, millions of innocent Kenyans are losing their livelihoods.
Their hopes and dreams for the future are being shattered regardless of how they voted.
We specifically appeal to H.E. the President, Hon. Mwai Kibaki and Hon. Raila Odinga to demonstrate their Statesmanship and save this great country from economic disaster Show Kenyans that you care about our country and act now by meeting and effecting a political settlement to this political crisis
Tourism must be given priority to rebuild our economy and our leaders need to address this issue immediately.
Tourism Creates Wealth. Tourism Creates Employment. Tourism Alleviates Poverty!
Please restore and maintain peace!!!
Kenya Tourism Federation : Tel: 601343, Fax: 604730 Tourist Helpline: 254-020-604767 Cell: 0722 745645/0733 617499 Email : safetour@wananchi.com