Violent Opposition Protests in Kenya Derail Tourism Industry Rebound

David Herbling
·3 min read
1
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

(Bloomberg) -- Ongoing opposition protests in Kenya are undermining a nascent recovery in the nation’s tourism industry after the easing of coronavirus restrictions.

Most Read from Bloomberg

The demonstrations against surging living costs and the outcome of last year’s elections have coincided with the peak of the tourism season, impacting hotels, lodges, restaurants and tour organizers. About 3.1 million people are directly employed in the industry, Kenya’s third-biggest source of foreign exchange, with its abundant wildlife and picturesque Indian Ocean beaches the main attractions.

“Every day we’re seeing cancellations, both business and leisure travelers. Getting these bookings back is hard,” Mike Macharia, chief executive officer at Kenya Association of Hotelkeepers and Caterers, said in a phone interview. “This will kill the industry. It means we forget the second half of this year. This madness has to stop.”

Main opposition leader Raila Odinga, who narrowly lost the August presidential elections to William Ruto, called for the protests after the Supreme Court rejected his application to overturn the result. Besides demanding an audit of all election-related technology that he says will prove he was the rightful winner of the vote, Odinga wants the opposition to have more say in the appointment of electoral-agency officials — a process he argues is controlled by the government.

Read More: Why Kenya Has Been Rocked by Opposition Protests: QuickTake

The protests were suspended in April after the government agreed to talks with the opposition over electoral reforms and measures to reduce living costs, but resumed on July 7 following the introduction of new taxes, including a doubling of value-added tax on fuel. The unrest has persisted despite the High Court suspending the levies.

Almost two dozen people have died in violence related to the demonstrations in the past week alone, according to the UN Human Rights Office. Businesses have been shuttered and looted, and public infrastructure has been vandalized. Commuter train services were suspended last week due attacks on carriages, according to Kenya Railways Corp.

The UN agency is “very concerned by the widespread violence, and allegations of unnecessary or disproportionate use of force, including the use of firearms, by police during protests in Kenya,” spokesman Jeremy Laurence said in an emailed statement.

Ruto has taken a tough line against the protesters, accusing Odinga of taking advantage of disgruntlement over high food and fuel prices to try and overturn the outcome of a legitimate election. The hit to the tourism industry will have a knock-on effect on tax collections at a time when the country is already at high risk of debt distress, with the government spending more than half of the revenue it collects on servicing its loans.

Read more: IMF Poised to Expand Kenya Loan Program by 45% to $3.5 Billion

The protests and the suspension of the tax hikes by the courts have “made the Kenyan government’s task of averting a sovereign default all the more difficult,” Capital Economics said in an emailed note.

Companies in the tourism industry will start cutting jobs if the protests continue, placing downward pressure on wages, according to Macharia.

“It’s going to be a tall order” to achieve a target of growing tourism earnings by 60% to 425.4 billion shillings ($3 billion) this year, he said.

Most Read from Bloomberg Businessweek

©2023 Bloomberg L.P.