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Kenya Tourism Report Q4 2009Published by: Business Monitor International Published: Sep. 16, 2009 - 45 Pages Table of Contents
AbstractFor the tourism industry in Kenya, 2008 can only be described as having been disastrous. It began withthe unexpected violence following the disputed 2007 elections. While no tourist areas were involved andno tourists were injured, most governments posted negative travel advice and inbound tourism collapsed.Kenya’s Tourism Minister Najib Balala was quoted on 17 August as saying that tourism is recoveringfrom the post-election crisis at the start of 2008. ‘Following successful marketing campaigns in Europeand Asia among other continents, tourism has now bounced back as tourist arrivals are on the increase,’Balala said. The depth of the post election crisis in 2008 can be appreciated from the fact that despite the globaleconomic downturn, 2009 still appears as a year of recovery. Like many countries around the world, Kenya is promoting domestic tourism this year in an attempt tocounter balance the fall in international arrivals. There are of course limitations to this strategy. Firstly,while international tourists are drawn to the inland game parks, domestic tourism (plus tourism fromneighbouring African countries) is focused on the Indian Ocean beach areas centred on Mombasa. A localnewspaper, The National, reported that the coastal areas were packed during a recent holiday weekend,but noted that the holidaymakers were almost all Kenyan. Secondly, internal holidaymakers do not spendat the same level as Western tourists and, of course, they do not generate foreign exchange earnings. Political Risk Prime Minister Raila Odinga has claimed that there are no splits in the coalition government's cabinetregarding the way in which to deal with the alleged perpetrators of post-election violence. In mid-July, hesaid that 'it is a matter of extensive and intensive consultations, and I am sure the cabinet will reach anagreement' when asked about the prospects for setting up a local tribunal to try the suspects. However, theestablishment of a local court would likely be unpopular, politically. According to a poll conducted bySteadman, 68% of Kenyans want violence perpetrators to be tried at the ICC. Economic Risk Kenya is set to experience relatively favourable growth in a global context, with our real GDP growthforecasts for 2009 and 2010 standing at 2.5% and 3.9% respectively, followed by trend growth around4.6% annually over 2011-2013. Latest data suggest that the East African nation is weathering the globalrecession relatively well, auguring for robust economic activity over the coming quarters. Indeed, Kenyahas outperformed our expectations, giving us reason to revise upward our growth forecasts from 1.1% and3.4% previously, for 2009 and 2010 respectively. Headline inflation in Kenya fell to 17.8% year-on-year (y-o-y) in June from 19.5% y-o-y in May. Aspokesperson for the National Bureau of Statistics attributed the decline to 'a continued fall in the pricesof cabbages, potatoes and other seasonal food items'. According to the data, prices of food and nonalcoholicdrink declined by 2.6% month-on-month (m-o-m) in June. Underlying inflation, which excludesfood items, also trended down - falling to 5.8% y-o-y in June from 7.0% in May. We expect headlineinflation to continue declining over the remainder of the year, hitting 12.0% y-o-y by end-09. Business Environment Kenya is East Africa's most developed country. Prior to the post-election crisis of December 2007, thenation enjoyed swift economic growth and a high level of political stability. Kenya attracts businessthanks to its reasonably good airport facilities, flexible labour regulations and investment laws, whichallow foreign investors to receive the same treatment as local investors. However, there are weaknesses inthe business environment, most notably a high level of corruption, which can make it difficult for bothlocal business and foreign firms to operate in a transparent fashion. Get Full Details About This Report >> |
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