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Kenya Post-Electoral Violence Wipes Out Businesses; Jobs


The violence that swept across Kenya following December's disputed elections severely affected the Kenyan economy, wiping out hundreds of businesses and hundreds of thousands of jobs. Kenya's third largest city, Kisumu, was particularly hard hit. Correspondent Scott Bobb reports from the western city.

Abdul Omar steps through his empty mobile telephone shop in downtown Kisumu. It was sacked in riots that erupted after Kenya's disputed elections.

More than 70 businesses were destroyed in Kisumu alone and many were set on fire causing millions of dollars worth of damage in one of the least wealthy regions of the country. Omar, who lost $70,000 worth of phones and air-time cards, is bitter.

"It is the worst thing that has ever happened to this town and personally it has really hurt me because this is one place I was intending to live the rest of my life," he said. "This is one place I really had hopes for."

Kisumu is a provincial capital of Nyanza Province of about 700,000 people on the edge of Lake Victoria in western Kenya. It is in the traditional homeland of the Luo ethnic group, which supported opposition leader and favorite son Raila Odinga.

The Luo since independence in 1963 have felt marginalized by the central government in Nairobi. They feel politics and business in the country have been dominated by the Kikuyu ethnic group, traditionally from central Kenya, which tended to support President Mwai Kibaki.

When Mr. Kibaki was declared the winner of the elections, which many believe were rigged, mobs marched into the Kisumu city center, looting businesses and sacking government buildings.

Omar, one of the victims, supports Odinga. He says some businesses were targeted because their owners were Kikuyu, but most were looted simply because they contained desirable commodities, like electronic goods, clothes and food.

Up the street on a busy corner stand the remains of one of the city's largest supermarkets, Ukwala.

The multi-storied building nearly the size of football field, is now a gutted cement shell whose twisted gates are rusting in the equatorial sun. A second store down the street was also partially looted.

Store director Hitesh Dhanani says he lost $20 million worth of goods, but that was not all.

"We have lost a lot of things, not just the value [of the looted goods] itself, but in terms of employment and in terms of our commitment to this area, in terms that we had been helping the underprivileged on a monthly basis," he said.

Dhanani says his company was supporting several charities in town, but because of its losses it had to suspend the aid. Before the riots, the company earned $1 million per month and employed more than 200 workers. Now it is operating at 35 percent of capacity and has laid off all but 55 employees.

Business leaders say the unrest nationwide caused business losses of nearly $4 billion and about 400,000 jobs. As a result, economic growth, projected to reach eight percent this year, has been downgraded by as much as four percentage points.

A trade officer with Kenya's National Chamber of Industry, John Ngeri, says small and medium businesses like shop owners and market traders were hardest-hit. And these he says are the least likely to have the capital needed to rebuild.

"There are places whereby what we faced will take such a long time for it actually to recover," he said. "If you look at Kisumu, the kind of destruction that we see today may take another 10 to 15 years to get back to where it was."

He says the chamber tries to help businessmen with counseling for their trauma and sources of possible financing to help them start over.

Dhanani's insurance company covered the losses at his supermarket, but the day after the riots it canceled coverage for losses due to civil unrest. Nevertheless, he remains optimistic.

"The future is still bright, but it all depends on the political climate," he said. "If that settles down believe me the dust will settle down the next day. If those people settle down, Kenya is still a place were people can invest."

Abdul Omar, who did not have insurance on his cell phone shop, does not plan to re-open this business. Although he has two other businesses, he is not eager to stay.

"If I can get someone who can buy me out right now, believe you me I am not staying behind," he said. "What we have seen in Kenya, many people did not expect. The face of democracy [in Kenya] is being turned completely into an ugly creature."

Most agree the scars from the violence will take a long time to heal. But they say if the reconciliation talks in Nairobi succeed, then business eventually will recover and the long-term effects will be less severe. If the talks do not succeed, then they say the future of Kenya is too bleak to contemplate.

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