Before Attack, Kenya's Economic Future Was Bright
By Ken Sweet
NEW YORK -- 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 such brands 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% a 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% this year, according to the International Monetary Fund, and the Nairobi Stock Exchange is up 21% 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 speech Sept. 17 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 part 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 had a negative impact on 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%, according to the country's National Bureau of Statistics. Similar drop-offs in tourism occurred following the 1998 U.S. embassy bombings in Nairobi.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV