The horrific events that unfolded last week in Kenya have left many people wondering what comes next for the country. In my view it will unite the country in the way that 9-11 did for the US – at least temporarily. Just before Westgate this country was riven by divisions over the International Criminal Court’s prosecution of the sitting President and Vice-President; if those leaders handle the fallout from this attack well, Kenyans may unite behind them. The likely concerted security response encompassing Somalia, the home of the perpetrators – Al Shabaab – will further unite Kenyans in the short term.
Understandably, some are asking what the implications for the investment environment in Kenya are. I was interviewed on this subject by the Mail and Guardian newspaper.
For reasons spelled out there, I am not pessimistic. Kenya has enduring comparative and competitive advantages that will not be easily eroded. Its major problem, in my view, is its debilitating domestic, ethnically-driven politics, which have rendered concerted economic policy making difficult, if not impossible.
During my recent visit to Kenya I was struck by just how powerful the ethnic dimension remains, in a society characterised by stark insider-outsider divides. We went in search of the Kenyan middle classes – the object of much international consulting group fetishising – and the best hope for political stability and democratic accountability. That will be the subject of another blog down the line. Nonetheless, its extent and influence proved elusive to establish, albeit signs of it were everywhere and particularly in the Nairobi traffic. Yet, like many African countries Kenya remains predominantly poor, with Nairobi’s infamous slums, particularly Eastleigh, offering a recruiting haven for Somali exiles and the Somali diaspora. Thus the purveyors of Islamic radicalism are assured a continued supply of foot soldiers literally in the belly of Nairobi.
Nonetheless, Kenya is undoubtedly the gateway to East Africa, possessing an enduring set of geographical advantages that will not change in the short to medium term even if Al Shabaab possesses the wherewithal to repeat these atrocities regularly, which does not appear likely. Furthermore, a number of prominent Kenyans told me that President Kenyatta is very tuned in to the needs of business meaning their desires, particularly with respect to building critical trade-related infrastructure, are likely to be attended to. So if he, and Kenya’s political class, can unite the country in the wake of this disaster and debottleneck its infrastructure then there is no reason the country can’t fly.