Kenya: Illusions of Progress

Julian Fisher writes from Nairobi:

Eating at the self-consciously up-market Caramel restaurant in Nairobi, one could easily forget the deadly siege that took place a little over a year ago at the nearby Westgate Centre.  And that Nairobi has suffered a series of bomb attacks by the al-Shabaab terror group since Kenya launched Operation Linda Nchi in Somalia a little over three years ago.  Forget the inter-ethnic violence of 2007-08; forget the fact that the country’s president is still on trial at the International Criminal Court for his alleged role in that violence; order another bottle of wine from the reserve list, try to forget the exorbitant cost, and relax.  For this city is as much in bloom as the jacaranda trees that momentarily glorify its streets at this time of year.

In recent years, new hotels have sprung up in Nairobi to rival up-market joints in London or New York, while the number of new shopping malls completed, under construction or planned is bewildering.  Carrefour reportedly plans to open a chain of supermarkets, many of which will probably be located in these malls.  The city is littered with bill-boards for luxury apartment blocks.  Constant construction of new roads seems only to compound the problem of traffic congestion.  Surely, Kenya’s businessmen, politicians and sprawling corps of diplomats and aid workers are not sufficient in numbers and wealth to support several replicas of the now-destroyed Westgate mall and to live in an apparently never-ending supply of exclusive apartments served by the new roads?  What is the international investor community thinking?

At least part of the answer is that Nairobi’s current growth-spurt is not driven primarily by international thinking.  Much of the investment is underpinned by local entrepreneurial spirit.  Many of the new restaurants are locally-owned: it is rumoured here that the Nairobi franchise of the Emirati Caramel restaurant is owned by a well-known Kikuyu businessman from a political family.  Hence the rather odd geographical tag-line for the chain of ‘Dubai, Abu Dhabi, Nairobi’, which is vaguely reminiscent of Trotters Independent Trading Co’s ‘New York, Paris, Peckham’.  A source close to Uhuru Kenyatta tells me that the latter is dedicated to the cause of locally-driven growth.  His attempts to nurture such growth are evidently bearing fruit, but it is not without its problems.

Much of the investment is in vanity projects.  As my Kenyan taxi-driver put it to me, ‘the politicians want to have their own street stalls, like wananchi [the common man], but they want them in the form of expensive restaurants and hotels.  They want their own bomas [residential and livestock enclosures], but in the form of apartment blocks’.  This is all readily understandable and not a phenomenon unique to Kenya or Africa.  But it is crowding out badly needed investment in agriculture, extractive industries and manufacturing, from which further wealth could be created and economic growth sustained.  Some investors seem to have decided to skip the primary and secondary stages of economic evolution and leap to the tertiary.  This will not tackle high rates of unemployment, turn Kenya from a recipient of food aid to a major food exporter, or curb the cringing prevalence of poverty even in the city centres.

Make no mistake: Kenya’s problems have not been spirited away by its economic resurgence.  The street-kids – that unlovely remnant of the Moi years, more or less eradicated in the Kibaki years – are making a comeback.  The gap is ever-widening between the haves and the have-nots in Kenya.  And ethnic resentment against the joint-ruling Kikuyu and Kalenjin is deep-seated and growing.  It is whispered, but it is there, with who knows what potential for future conflict.  The international oil companies have made their bids for oil-blocks on the border with Somalia but are reluctant to commence drilling for fear of the prevalent insecurity.  And al-Shabaab has not gone away, albeit that it has been relatively dormant in recent months.

Such problems might be addressed in part by a ripple-effect from growth.  But the most immediate ripple-effect of the current wave of investment in the superficial is likely to favour the country’s rapidly growing man-guarding industry.  Let’s hope the service provision from the numerous security companies is improving just as rapidly.  Otherwise, all those shiny new restaurants, hotels and apartment blocks may be little more than so many new potential terrorist targets. The jacaranda’s bloom is very short-lived.