Persistent terrorist attacks are expected to keep Kenya’s risk profile high in the next couple of years, dampening its attractiveness to investors despite the strong economic fundamentals.
This is according to the latest country risk assessment by American consulting firm IHS International.
The New York Stock Exchange-listed company warns in a research note that the attacks and rampant crime in Nairobi and Mombasa, if not checked, could erode the attractiveness of East Africa’s biggest economy as an investment destination despite its promising economic prospects.
Gus Selassie, the deputy head of Africa Analysis at IHS, says Kenya should expect terrorist attacks to continue in Nairobi and Mombasa as well as along the border with Somalia in the medium term with serious ramifications on the economy.
The assessment comes at a time when the government is preparing to sell a $2 billion Eurobond, whose pricing will be determined by Kenya’s creditworthiness, which is determined by country risk score.
“The insistence by the government that it will not be pulling its forces out of Somalia means the country remains a target of Al-Shabaab attacks beyond the next 12 months unless the group is defeated or severely weakened,” Mr Selassie says, adding that measures President Kenyatta announced in the State of the Union address are unlikely to result in an immediate improvement of the security situation in the next 12 months.
IHS conducts research for global clients in sectors like defence and security, energy and power as well as country and industry forecasting.
Kenya has in recent months suffered a series of terrorist attacks including last September’s assault on the Westgate Shopping Mall where at least 67 people were killed.
The government has more recently responded to deadly attacks in Mombasa’s Likoni and Nairobi’s Eastleigh districts with a controversial paramilitary operation, leading to the arrest of thousands of aliens and citizens it claims are responsible for the growing insecurity.
More than 80 Somalis were deported to Mogadishu and more continue to be held in different police stations, including the Safaricom Stadium in Kasarani.
Interior secretary Joseph ole Lenku, and Attorney- General, Githu Muigai have defended the operation, saying it would help restore sanity in the country.
Mr Selassie however says the duo and their colleagues in government have their job cut out for them in next 12 months for Kenya to get some semblance of security.
Besides highlighting the terror hot spots, IHS has identified upmarket neighbourhoods like Runda, Muthaiga, Parklands and Westlands as areas that will continue being the focus of crime such as carjackings and armed robberies.
NMG
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