Kenyan Economy Reels From Crisis

5 & 7 February 2008 BBC

Prices in Kenyan markets have increased sharply

Michael Joseph, the head of the mobile phone company, Safaricom, organised a meeting of more than 300 heads of industry in the capital, Nairobi, whose businesses together account for about 80% of the country's GDP. They gathered to draw up a list of proposals for the politicians. Calculating that the chaos of the past few weeks would cost $3.6bn by the end of the year, and as many as half a million people could lose their jobs. "Soon there will be no country to govern; and no people to tax. Every day of delay in sorting out the election crisis plunges Kenya deeper into trouble ", he says.

Agriculture

The chaos in Kenya has increased the prices of people's staple needs. Transport costs have soared, crops are rotting in the fields and the dislocation of agricultural workers has cut farm output.

Tourism

Heads of the tourist business have gathered in the capital, Nairobi to devise a strategy to minimize the damage to their industry. Revenue has been cut by an estimated $80m. But experts say the tourist business could recover quite quickly if there is a political solution which ends the violence and unrest affecting the Rift Valley and Western Kenya. Streets in these areas - scene of much of the recent violence - appeared calm today.

It was the country's top foreign revenue earner and brought in about $1bn last year. There should be more than 30,000 visitors at the height of the season. But the hotels lie empty. The industry used to employ a quarter of a million Kenyans directly and about 3m indirectly. But over the last month, 20,000 people working in tourism have lost their jobs.

Transportation

Public transport is operating at 40% of its usual levels - costing operators over $7m a day - and 20,000 employees in the sector have been laid off.