Kenyan firms worry over Iraq

Kenyan firms worry over Iraq

Gray Phombeah
BBC, Nairobi

As Nairobi's commuters go about their daily business the onslaught of the war in Iraq, some 4,000 kilometres away, is the last thing on their minds.

Tourism is expected to suffer

But not so for the business community in this East African nation where the war in Iraq is already causing ripples.

Business people are worried at the disruption to supplies from abroad and concerned that future reprisal attacks by terror groups could bring down the country's fragile economy.

"Shipping is disturbed when there is war, " says Chris Kirubi, a prominent businessman in the city.

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Reaction in Nairobi to the war on Iraq

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"We don't know exactly what is going to happen - whether there will be disruption to sea routes, whether there will be shortages of fuel, and also the issue of the local currency."

Mr Kirubi and his string of manufacturing businesses are not the only ones concerned.

Tourism concern

Kenya's tourism sector is also set to suffer a downturn in holiday bookings.

There are worries at possible reprisal attacks

"Certainly the tourism industry is going to be affected negatively", says Beatrice Buyu, the managing director of Kenya's Tourist Board.

"We saw that happening during the Gulf War in 1991 and we can see that being repeated .

"The advisory warning against tourists visiting certain regions - our country included - is also contributing to this. Britain is our largest market.

Flights

"And of course, the Americans are not going to travel because of these warnings."

Kenya's new government is prioritising the economy

However, it was business as usual at the International Jomo Kenyatta Airport in Nairobi as war sirens went off in Iraq.

But the big victims of the war could be the national flag carrier, Kenya Airways, and other travel firms.

"From previous experience, normally the airlines will look very carefully at their routes and will re-schedule accordingly to divert from any areas where there could be a security risk," says Jake Crieves-Cook, chairman of Kenya Travel Agents Association.

Buoyant stocks

The Kenyan Stock Exchange has not suffered so far.

The war in Iraq has had little effect on the stock market, says Kibuga Kariithi, Chief Executive of Nairobi stock exchange.

"Kenya stocks are rising for very, very simple reasons - because of the election of the Narc government in December and very low interest rates at the moment," he says.

"No Kenyan investor I've spoken to, has mentioned the Iraq war".

Kenya is seen as a major provider of strategic resources and logistics for the US and British vessels stationed in the Indian Ocean, and Mr Kariithi says the Iraq war could in fact bring spoils for some Kenyan businesses.

"Where's the beef going to come from, the rice, the beans, the cooking fat, for the soldiers? It's easier to re-supply from a place like Mombasa which is close by.

But it may not be long before the cost of war is also felt among ordinary Kenyans if revenues drop, jobs disappear and the cost of living soars.