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How Kenya’s tourism industry has felt the impact of terrorist attacks

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The impact of Kenya’s recent terrorist attack will be felt greatly by its tourism industry. Terrorism, and insecurity generally, is largelyresponsible for the sector’s poor performance over the last decade.

Between 2011 and 2017, there were on average 60 attacks each year carried out by different groups, each varying in magnitude. Over half of them are suspected to have been perpetrated by al-Shabaab. These include high-profile attacks in 2002 on Paradise hotel in Mombasa, the Westgate shopping mall in 2013 and Garissa University in 2015.

This had a huge impact on tourism numbers. Kenya’s vision 2030 – a development plan which aims to transform Kenya into a middle-income country – sought to increase tourism arrivals from 1.7 million in 2012 to three million visitors by 2017. But in 2017 the actual arrivals were only 1.45 million. 2014 was a particularly challenging year for the sector, as this was when terrorist attacks peaked at close to 100 incidences. The recent attack raises concerns that those dependent on tourism face the prospect of prolonged stagnation in the sector and job losses yet again.

Tourism is very important to the Kenyan economy. It provides huge employment and foreign exchange earnings. In 2017 the total contribution of travel and tourism to the Kenyan economy was about 9.7% of the country’s GDP. Travel and tourism accounted for about 9% of total employment in the same year.

Through my research I examine the impact of terrorism and travel advisories on tourism.

Each terror attack has a different impact on tourism and this is influenced by variables such as the scale of the attack in terms of lives affected (casualty and fatality levels), the damage to and type of property or facilities targeted, and the length of the siege. These all dictate the level of international media exposure, and the level of perceived risk among business and leisure travellers.

Measuring impact

My research analyses the combined data of attacks over several years and tourism arrivals to find an average effect. The number of fatalities and casualties are used as a measure of the scale of the attack.

On average, I found that there was a reduction of about 2508 visitors per year for every one fatality. This translates roughly to a loss of about Ksh157.1 million (about USD$1.5million) in tourism revenue per year for each fatality. These losses don’t capture the longer-term effects such as lost growth opportunities, or the social costs of lost lives and job losses.

The losses are felt by a range of people: hotel operators, taxi drivers, food vendors, tour guides and more. In some areas communities depend ontourists as clients for their curios or because they lease their land to hotel operators. On the coast, the fortunes of tourism-based towns like Malindihave declined.

In the longer term, the country’s competitiveness as a destination is compromised. Fewer tourists are willing to come and players in the tourism sector suffer as operational costs increase.

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Tourism

The government realises the significance of the sector and it is one of the six priority sectors in its development blueprint.

Kenya’s tourism industry is heavily focused on its beaches and wildlife – as is Tanzania’s. That means tourists have alternatives within the region and can easily switch to competing destinations if Kenya’s security continues to deteriorate.

Kenya’s advantage over the competition elsewhere in Eastern Africa has been in its high level of international air connectivity, better local infrastructure and tourist facilities. The main sources of tourists are Europe (particularly the UK, Germany and Italy) and the US, though there’s also been an uptick in the numbers from Asia (especially China) and other African countries.

The government has already tried to make improvements to the industry. For example it implemented a program that gave incentives to charter flights and launched an aggressive marketing campaign, under Magical Kenya – the tourism board’s platform.

The aim, in addition to keeping visitors coming, was to attract tourists from non-traditional countries – like those in Asia, the Middle East and other African countries.

Fixing the problem

The government has also invested in security. In 2016 it adopted a national strategy to counter violent extremism, implemented throughthe national counter-terrorism centre.

The effort shows. The prevailing sentiment is that the response to the recent attack was more efficient than during the Westgate attack. But more can be done.

There needs to be better security and monitoring along the Somali border. This should be done using a mix of technology – like surveillance and bomb detection systems. This is crucial because of the limitations of ground based security forces and physical barriers. International and regional cooperation in intelligence and information sharing will help to improve effectiveness and lower costs.

Terrorists do not live in isolation; they live within communities. Support for initiatives like Nyumba Kumi, which promotes community unity and policing, can complement other security measures.

Ultimately, though, a comprehensive strategy must be developed to deal with the political and ideological sources of conflict that have fractured Somalia. Countries in the region must support Somalia so that it is stable enough to eliminate the threat of terrorism by the al-Shabaab group.

It’s imperative that Kenya continues to keep making these strides. If it doesn’t, tourists will steer clear and opt for alternative destinations.

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Sordid tale of the bank ‘that would bribe God’

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Bank of Credit and Commerce International. August 1991. [File, Standard]

“This bank would bribe God.” These words of a former employee of the disgraced Bank of Credit and Commerce International (BCCI) sum up one of the most rotten global financial institutions.
BCCI pitched itself as a top bank for the Third World, but its spectacular collapse would reveal a web of transnational corruption and a playground for dictators, drug lords and terrorists.
It was one of the largest banks cutting across 69 countries and its aftermath would cause despair to innocent depositors, including Kenyans.
BCCI, which had $20 billion (Sh2.1 trillion in today’s exchange rate) assets globally, was revealed to have lost more than its entire capital.
The bank was founded in 1972 by the crafty Pakistani banker Agha Hasan Abedi.
He was loved in his homeland for his charitable acts but would go on to break every rule known to God and man.
In 1991, the Bank of England (BoE) froze its assets, citing large-scale fraud running for several years. This would see the bank cease operations in multiple countries. The Luxembourg-based BCCI was 77 per cent owned by the Gulf Emirate of Abu Dhabi.  
BoE investigations had unearthed laundering of drugs money, terrorism financing and the bank boasted of having high-profile customers such as Panama’s former strongman Manual Noriega as customers.
The Standard, quoting “highly placed” sources reported that Abu Dhabi ruler Sheikh Zayed Sultan would act as guarantor to protect the savings of Kenyan depositors.
The bank had five branches countrywide and panic had gripped depositors on the state of their money.
Central Bank of Kenya (CBK) would then move to appoint a manager to oversee the operations of the BCCI operations in Kenya.
It sent statements assuring depositors that their money was safe.
The Standard reported that the Sheikh would be approaching the Kenyan and other regional subsidiaries of the bank to urge them to maintain operations and assure them of his personal support.
It was said that contact between CBK and Abu Dhabi was “likely.”
This came as the British Ambassador to the UAE Graham Burton implored the gulf state to help compensate Britons, and the Indian government also took similar steps.
The collapse of BCCI was, however, not expect to badly hit the Kenyan banking system. This was during the sleazy 1990s when Kenya’s banking system was badly tested. It was the era of high graft and “political banks,” where the institutions fraudulently lent to firms belonging or connected to politicians, who were sometimes also shareholders.
And even though the impact was expected to be minimal, it was projected that a significant number of depositors would transfer funds from Asian and Arab banks to other local institutions.
“Confidence in Arab banking has taken a serious knock,” the “highly placed” source told The Standard.
BCCI didn’t go down without a fight. It accused the British government of a conspiracy to bring down the Pakistani-run bank.  The Sheikh was said to be furious and would later engage in a protracted legal battle with the British.
“It looks to us like a Western plot to eliminate a successful Muslim-run Third World Bank. We know that it often acted unethically. But that is no excuse for putting it out of business, especially as the Sultan of Abu Dhabi had agreed to a restructuring plan,” said a spokesperson for British Asians.
A CBK statement signed by then-Deputy Governor Wanjohi Murithi said it was keenly monitoring affairs of the mother bank and would go to lengths to protect Kenyan depositors.
“In this respect, the CBK has sought and obtained the assurance of the branch’s management that the interests of depositors are not put at risk by the difficulties facing the parent company and that the bank will meet any withdrawal instructions by depositors in the normal course of business,” said Mr Murithi.
CBK added that it had maintained surveillance of the local branch and was satisfied with its solvency and liquidity.
This was meant to stop Kenyans from making panic withdrawals.
For instance, armed policemen would be deployed at the bank’s Nairobi branch on Koinange Street after the bank had announced it would shut its Kenyan operations.
In Britain, thousands of businesses owned by British Asians were on the verge of financial ruin following the closure of BCCI.
Their firms held almost half of the 120,000 bank accounts registered with BCCI in Britain. 
The African Development Bank was also not spared from this mess, with the bulk of its funds deposited and BCCI and stood to lose every coin.
Criminal culture
In Britain, local authorities from Scotland to the Channel Islands are said to have lost over £100 million (Sh15.2 billion in today’s exchange rate).
The biggest puzzle remained how BCCI was allowed by BoE and other monetary regulation authorities globally to reach such levels of fraudulence.
This was despite the bank being under tight watch owing to the conviction of some of its executives on narcotics laundering charges in the US.
Coast politician, the late Shariff Nassir, would claim that five primary schools in Mombasa lost nearly Sh1 million and appealed to then Education Minister George Saitoti to help recover the savings. Then BoE Governor Robin Leigh-Pemberton condemned it as so deeply immersed in fraud that rescue or recovery – at least in Britain – was out of the question.
“The culture of the bank is criminal,” he said. The bank was revealed to have targeted the Third World and had created several “institutional devices” to promote its operations in developing countries.
These included the Third World Foundation for Social and Economic Studies, a British-registered charity.
“It allowed it to cultivate high-level contacts among international statesmen,” reported The Observer, a British newspaper.
BCCI also arranged an annual Third World lecture and a Third World prize endowment fund of about $10 million (Sh1 billion in today’s exchange rate).
Winners of the annual prize had included Nelson Mandela (1985), sir Bob Geldof (1986) and Archbishop Desmond Tutu (1989).
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Monitor water pumps remotely via your phone

Tracking and monitoring motor vehicles is not new to Kenyans. Competition to install affordable tracking devices is fierce but essential for fleet managers who receive reports online and track vehicles from the comfort of their desk.

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Agricultural Development Corporation Chief Accountant Gerald Karuga on the Spot Over Fraud –

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Gerald Karuga, the acting chief accountant at the Agricultural Development Corporation (ADC), is on the spot over fraud in land dealings.

ADC was established in 1965 through an Act of Parliament Cap 346 to facilitate the land transfer programme from European settlers to locals after Kenya gained independence.

Karuga is under fire for allegedly aiding a former powerful permanent secretary in the KANU era Benjamin Kipkulei to deprive ADC beneficiaries of their land in Naivasha.

Kahawa Tungu understands that the aggrieved parties continue to protest the injustice and are now asking the Ethics and Anti-corruption Commission (EACC) and the Directorate of Criminal Investigations (DCI) to probe Karuga.

A source who spoke to Weekly Citizen publication revealed that Managing Director Mohammed Dulle is also involved in the mess at ADC.

Read: Ministry of Agriculture Apologizes After Sending Out Tweets Portraying the President in bad light

Dulle is accused of sidelining a section of staffers in the parastatal.

The sources at ADC intimated that Karuga has been placed strategically at ADC to safeguard interests of many people who acquired the corporations’ land as “donations” from former President Daniel Arap Moi.

Despite working at ADC for many years Karuga has never been transferred, a trend that has raised eyebrows.

“Karuga has worked here for more than 30 years and unlike other senior officers in other parastatals who are transferred after promotion or moved to different ministries, for him, he has stuck here for all these years and we highly suspect that he is aiding people who were dished out with big chunks of land belonging to the corporation in different parts of the country,” said the source.

In the case of Karuga safeguarding Kipkulei’s interests, workers at the parastatals and the victims who claim to have lost their land in Naivasha revealed that during the Moi regime some senior officials used dubious means to register people as beneficiaries of land without their knowledge and later on colluded with rogue land officials at the Ministry of Lands to acquire title deeds in their names instead of those of the benefactors.

Read Also: Galana Kulalu Irrigation Scheme To Undergo Viability Test Before Being Privatised

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“We have information that Karuga has benefitted much from Kipkulei through helping him and this can be proved by the fact that since the matter of the Naivasha land began, he has been seen changing and buying high-end vehicles that many people of his rank in government can’t afford to buy or maintain,” the source added.

“He is even building a big apartment for rent in Ruiru town.”

The wealthy officer is valued at over Sh1.5 billion in prime properties and real estate.

Last month, more than 100 squatters caused scenes in Naivasha after raiding a private firm owned by Kipkulei.

The squatters, who claimed to have lived on the land for more than 40 years, were protesting take over of the land by a private developer who had allegedly bought the land from the former PS.

They pulled down a three-kilometre fence that the private developed had erected.

The squatters claimed that the former PS had not informed them that he had sold the land and that the developer was spraying harmful chemicals on the grass affecting their livestock and homes built on a section of the land.

Read Also: DP Ruto Wants NCPB And Other Agricultural Bodies Merged For Efficiency

Naivasha Deputy County Commissioner Kisilu Mutua later issued a statement warning the squatters against encroaching on Kipkuleir’s land.

“They are illegally invading private land. We shall not allow the rule of the jungle to take root,” warned Mutua.

Meanwhile, a parliamentary committee recently demanded to know identities of 10 faceless people who grabbed 30,350 acres of land belonging to the parastatal, exposing the rot at the corporation.

ADC Chairman Nick Salat, who doubles up as the KANU party Secretary-General, denied knowledge of the individuals and has asked DCI to probe the matter.

Email your news TIPS to [email protected] or WhatsApp +254708677607. You can also find us on Telegram through www.t.me/kahawatungu

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William Ruto eyes Raila Odinga Nyanza backyard

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Deputy President William Ruto will next month take his ‘hustler nation’ campaigns to his main rival, ODM leader Raila Odinga’s Nyanza backyard, in an escalation of the 2022 General Election competition.

Acrimonious fall-out

Development agenda

Won’t bear fruit

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