Kismayu, the southern Somalia town that was the last holdout of Al-Shabaab has fallen. Kenya Defense Forces (KDF) took control of the town early Friday. It is still unclear what happened to many of the fighters that had dug in to defend the town from KDF and AMISOM.
I hope that AMISOM will consolidate the recent gains and that Somali politicians will seize this opportunity to lay the groundwork for peace and stability moving forward.
I also hope that for KDF’s troubles Somali townspeople in Kismayu, Mogadishu and elsewhere will soon get to enjoy the services and products of Equity, KCB, Uchumi, Nakumatt, among other Kenyan companies. Economic integration of Somalia into the EAC, and similarly South Sudan and Eastern DRC, will be one of the key ways of guaranteeing a lasting peace in these trouble spots and in the wider Eastern Africa region.
More on the developing story here and here. You can also follow updates from the al-Shabaab’s twitter handle @HSMPress.
Here is introducing the annual Stanford Africa Forum:
SAF is organized by a multinational and multidisciplinary group of Stanford University students who share a common passion: a firm belief in the potential and promise of the African continent. Previous editions of the Forum have placed the spotlight on this potential and we plan to continue in this tradition with the 2012 edition.
Here is a link to the 2012 SAF Conference website. If you can make in on Feb 25th 2012 please register and show up.
The Kenyan economy is expected to grow by 4.3% this year. That is a downgrade from 6%, as had been projected by the treasury. Erratic rains, high cost of fuel (Kiraitu Murungi should resign), and general inflation are to blame.
The Shilling has also had a beating in the last few months. While a weak shilling is generally good for exports, it is is terrible for the fuel bill (oil is priced in USD). The Central Bank tried to mop up the excess Shillings in the economy with no avail. Last Saturday when I visited the local Western Union the Shilling was trading at KSHS 80 to the US dollar. Not so long ago the rate was in the low 70s.
The shaky macro-economy aside, the Kenyan private sector is doing OK.
Just the other day mortgage companies announced plans for 100% financing. House prices will definitely go up, at least in the short-run (a.k.a before the bubble bursts due to oversupply). The long-run benefits won’t be trivial. More construction means more jobs, the benefits of the multiplier effects of property, and (crucially and obviously) more houses. The current housing deficit runs in the hundreds of thousands of units per year.
Private sector confidence is also reflected in private sector leveraging. The private sector debt as a fraction of the economy has grown to about 50%. This is the best measure of confidence (in my view). Finance is fickle and thrives on stability. The bosses of Equity (and other banks) will not let the loudmouth tyrants and thieves who parade as democrats adversely affect their bottom line.
Because of its big service sector, future growth in Kenya will be predicated on confidence in the country’s political economy. Remember that Kenya is Africa’s biggest non-mineral economy. South of the Sahara and north of the Limpopo only the oil giants Nigeria and Angola have bigger economies.
For some reason (thereby dis-confirming my fears) the incendiary nature of Kenyan siasa za ukabila (ethnic politics) is not doing that much damage. Two cheers to Kenyan biashara.