Lamu attack: 63 dead, tourism under threat

Police have confirmed the deaths of 15 people in a fresh terror attack Monday night in Poromoko area, near Mpeketoni town.

This raises the death toll from attacks in Lamu district to at least 63 people.

Eight more bodies were recovered overnight from villages in Mapenya sub-location, north of Mpeketoni, leading to protests by residents. Three houses were torched in the area and police Tuesday were trying to establish if this was in retaliation for the attacks.

Lamu Deputy Governor Eric Mugo told journalists Tuesday that eight bodies were recovered from villages around Mpeketoni. There was no word on whether these victims were killed in Sunday’s attack or in a second terror incident.

Meanwhile, analysts have warned the brazen attacks could significantly impede Kenya’s economic growth.

Economists are warning that the latest attack — and the partisan response from politicians — could affect liquidity of the Sh320 billion Eurobond that went on sale yesterday and depress tourism further. The performance of the Kenya Shilling, analysts add, could also be negatively impacted.

“Whether this (attack) is linked to politics or not is yet to be verified, but we do not rule it out. The government will not allow those openly inciting the public to jeopardise Kenyans or the economy,” said Interior Secretary Joseph ole Lenku during a briefing Monday afternoon before flying down to Lamu to assess the situation.

The Coalition on Reform and Democracy (Cord) Secretary-General Anyang’ Nyong’o released a statement that accused the government of misdirecting its efforts against insecurity. “It (government) focuses on imaginary threats to security by Cord while Al-Shabaab kill our people and take over police stations,” said Mr Nyong’o.

The party asked Mr ole Lenku to resign following the series of terror attacks.

But Jubilee leaders blamed Cord leader Raila Odinga for the attacks, claiming that a series of rallies to push for national dialogue may have led to the incident. “The threats coming from Mr Odinga to the effect that the country is yet to witness a political storm should not be taken lightly,” said Kikuyu MP Kimani Ichung’wa.

Cord rejoinder

In a rejoinder, Cord co-principal and Senate Minority Leader Moses Wetang’ula said the government was using “this talk of politics as an avenue for escape whenever security has failed”. Economists, however, say there will be serious ramifications on the economy if insecurity is not addressed.

One of the more immediate casualties, they say, could be the Eurobond which started selling in London yesterday seeking to raise between $1.5 billion (Sh132 billion) and $2 billion (Sh176 billion).

The bond was oversubscribed with the country receiving $3 billion (Sh264 billion) in orders. “The government’s reaction towards containing the fallout from the latest attack is critical,” said Robert Bunyi, an investment analyst at Mavuno Capital.

He added that the bond’s yield would fluctuate according to the prevailing macro-economic situation, affecting investor earnings, in the medium term. “Once the bond is trading on the open market, its yield could be affected by the news coming out of the country,” Mr Bunyi said.

Bloomberg yesterday reported that the country is offering investors “the five-year Eurobond at a yield in the low six per cent area and a 10-year bond in the low seven per cent range.”

Bond’s success

The performance of the shilling could soon also be affected by the bond’s success. Analysts said event risks like the recent terrorism attacks will remain a major factor in the trend towards depreciation.

“Near-term drivers of the Kenya Shilling will be the Eurobond issuance – providing some support today – as well as the security situation, with event-risk a negative for the Kenya shilling outlook,” said Ms Razia Khan, the head of research on Africa at Standard Chartered Bank Plc.

The latest attack, the deadliest since the Westgate attack in September last year, took place just 54 kilometers from the popular tourist resort town of Lamu.

Fifty heavily armed gunmen drove into Mpeketoni and Kibaoni towns and fired indiscriminately at residents and torched buildings, including a police station, a petrol station, government offices and hotels and 20 vehicles.

Business premises belonging to Equity Bank, Kenya Women Microfinance Bank Limited (KWFT) and Kenya Commercial Bank branches were also burned during the attack.

Mpeketoni, which was started in the 1960s as a settlement scheme by the late President Jomo Kenyatta, is about 100 kilometres from the border with Somalia and is mainly a farming area.

“The attackers came in around 9 p.m. I heard them shouting in Somali as they fired around. I ran and locked up myself in a house,” John Waweru, who lost two brothers in the incident, told AFP. The attack comes in the wake of dipping tourism numbers.

A month ago, the industry suffered a setback when the United Kingdom, the US and Australia issued travel advisories which culminated into the evacuation of 500 British tourists from hotels at the Coast. Last week, the British government closed down its Mombasa consulate over security concerns.

“The rising insecurity does not augur well with the tourism sector as already we are feeling the effects of travel advisories. The government should secure all tourist attraction areas,” said Kenya Association of Hotelkeepers and Caterers Coast branch executive officer Sam Ikwaye.

Most hotels at the Coast have since March been operating at 40 per cent occupancy, save for the Easter season when the figure rose to nearly 90 per cent, causing over 2,500 jobs to be lost. The peak tourism season runs between July and September but bookings are made in advance.

“This (attack) could lead to more cancellations of bookings because of the way the story is being reported in source markets,” Kenya Tourism Federation chief executive officer Agatha Juma said.

The Kenya Private Sector Alliance (Kepsa) said political bickering and insecurity would hinder efforts to grow the economy.

“We are concerned that ongoing political mobilisation has already heightened political temperatures and is likely to threaten peace, cohesion and even lead to increased insecurity,” said Kepsa chairman Vimal Shah.

Additional reporting by Edwin Mutai and Lynet Igadwah.