The political impasse and the on going turmoil in
Uneasy observers are now watching
The turmoil, insecurity and political unrest following Mr. Kibaki’s re-election will only serve to further undermine
With 2007 earnings estimated at nearly US$ 950m, tourism is the country’s main foreign exchange earner. But all the major tourist supply countries around the world have issued travel warnings. Tourist arrivals are expected to decline sharply over the next three to six months. Kenya Association of Tour Operators estimates that the tourism industry will loose about US$300m in the first quarter of 2008. There is no telling how long this downturn will last.
The violence in the Rift Valley has seen many flee their homes and farms. Disruption in transportation and widespread unrest in major towns and cities have had disastrous effects on food supplies and agricultural commodity markets. Farmers in Kisii, Keroka, Molo,
The expected decline in agricultural production in the Rift Valley will not be short lived. The grim reality is that aftermath of the poll has unpacked deep-seated ethnic odium. A political truce or coalition government will not defuse ethnic tensions and restore sufficient confidence to convince those who were displaced to return to their land. Given that agriculture is directly responsible for one-quarter of GDP, there will be a significant downturn in 2008 directly attributable to the political turmoil.
The Central Organization of Trade Unions (COTU) warned that over 500,000 workers risked loosing their jobs following post election unrest. It is difficult to ascertain the validity of these numbers. However, any layoffs in this magnitude will have a devastating knock on effect on the economy. Poverty will increase because of loss of income for a majority of unskilled workers. Low consumer spending will further affect an already fragile agricultural sector.
There are deep concerns about donor funding. The EU has moved to cut further financial support to the country. Although this is powerful in its symbolism, the Kenyan government is likely to dismiss it as inconsequential. The
Mr. Kibaki may find an ally, a counter weight to the West, in
This ominous halo of political turmoil does not bode well for
The World Bank’s January forecast for