After Terror Attacks, a Test for Kenya’s Economy

Kenya - Westgate Mall Escape

Photograph by Simon Maina/AFP via Getty Image

A policeman carries a baby to safety after masked gunmen sprayed gunfire on shoppers and staff in the Westgate Mall in Nairobi, Kenya.

In a short article that’s a good reminder of the complicated ways world economies are interconnected, Bloomberg’s Sarah McGregor reports that Kenya still plans to sell $1.5 billion in dollar-denominated bonds by December. A successful sale would make Kenya the second East African country, after Rwanda’s $400 million issue, to pull off a euro-denominated bond offering.  The bonds would pay down Kenyan debt and also pay for infrastructure in a country that badly needs it. Even with five percent yearly growth, as Bloomberg’s David Malinga Doya reported earlier this month, half of Nairobi’s residents live in slums.

The Westgate Mall attack underlines just how precarious efforts to build African economies are. Despite a history of political violence, some it linked by an investigative commission to Kenya’s newly-elected president, Uhuru Kenyatta, Kenya still counts as one of Africa’s more stable economies. The planned bond deal would let Kenya borrow more reliably and cheaply than it currently can with 364-day Kenyan shilling debt.  Interest rates in the West widely expected to rise, so Kenya is trying to take advantage of what could be a very narrow window for a bond offering, and the attacks have obviously made that window feel even narrower.

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