Thursday, February 18, 2010

Somali Pirates: What This Means for Kenya

Special Report by Jane Lonsdale
Edited by Aisha Mohammed

Pirate activity has been a real threat to some coastal African countries ever since the start of the Somali Civil War. These acts of piracy can hinder efforts to deliver goods and can raise shipping costs to countries located along the coastal route through Somalia. Neighboring Kenya’s commerce and international trade has been devastated by the continued hijacking of ships by Somali’s pirates.

However, some businesses have benefited from this battle with the Somali pirates. Those involved in the Kenyan fishing industry say there appears to be an increase in the amount of fish recently. Although there has been no official explanation for this, some speculate that illegal foreign fishing vessels no longer line up along Somalia’s coast to catch all the fish, for fear of being captured and held ransom by pirates.

Fisherman Howard Lawrence Brown owns a catch and release company in Mombasa called Kenya Deep Sea Fishing. He says that he has seen “huge amounts of fish for the first time in about ten years.” Lawrence Brown has seen a sudden spike specifically in the quantity of bill fish and all types of marlin. As of recent, his business has been flourishing due to the increase in demand for sports fishing.

Not all people within Kenya benefit from these acts of piracy. There has been new concern over drastic increases in property costs within the country, making houses unaffordable for some Kenyans. Kenya and Somalia share a border, and Somalians have migrated to partake in Kenya’s vibrant investment opportunities. Many suspect that Somali pirates are moving as well, to invest laundered ransom money into Kenya’s estates. Dr. Peter Githinji, now an Ohio University professor, but born and raised in Central Province agrees that the greatest problem has to do with real estate investment. “A house that cost $20,000 a few years ago now costs almost four times that amount. A lot of people cannot afford housing.” A spokesman for Prudential Financial Group in Kenya says that their business has been personally affected as well. Property sales with the group have been low due to many people being unable to afford the high mortgage rates. Real land rates have increased by as much as 300% in the last two years alone.

Somali pirates have received nearly $100 million in ransom money over the past two years, according to a recent report by the Associated Press. Many of the pirates are leaving the conflicted country of Somalia, in hopes of establishing a more stable and luxuriant lifestyle in Kenya. A website promoting Kenyan investment promises that under the Kenyan constitution, there is a guarantee of protection of life and private property. There is also a Foreign Investment Protection Act set in place that protects against confiscation of private property by the government.

With all of these promises and hopes for future investment, many Somalis take the initiative to participate in Kenya’s opportunities. A major problem is that Kenyan government officials cannot determine where all the new investment funds are coming from. Dr. Githinji explained that there are many ordinary Somali people who create businesses within Kenya, as well as those who have earned their money through piracy ransoms. Githinji says he would like to see investments in industries versus housing, stating that this might help the Kenyan economy overall.

There is no question that there has been a significant impact on Kenya’s economy due to the actions taken by Somali pirates. The prosperity within Kenya is yet to be determined, as it continues to develop. In a country surrounded by conflict, Kenya has managed to establish some sense of stability, in hopes of creating further prospective opportunities.

Photo from United Nations University.

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