South Sudan war could cost Kenya billions - report
South Sudan President Salva Kiir shares a light moment with Kenyan President Uhuru Kenyatta. Kenya stands to lose as much as $24 billion in economic output if the war in South Sudan continues PHOTO|AGENCIES
What you need to know:
- Much of that cost would take the form of sharply reduced trade between Kenya and its troubled neighbour, said the report by Frontier Economics
New York, Wednesday. Kenya stands to lose as much as $24 billion in economic output if the war in South Sudan continues at high intensity for another five years, a London-based economic consulting firm warned on Wednesday.
Much of that cost would take the form of sharply reduced trade between Kenya and its troubled neighbour, said the report by London-based Frontier Economics.
“Kenya has substantial commercial interests in South Sudan,” notes the 26-page study titled South Sudan: The Cost of War.
“These reflect Kenya’s role as a major source of South Sudan’s imports, and the significant investments made by Kenyan enterprises in several service sectors, notably banking, communications and retail.” Continued conflict in South Sudan also presents the prospect of Kenya being confronted with another “failed state” on its borders in addition to Somalia, Frontier Economics says.
“A second failed state in the region is likely to increase the difficulty and costs Kenya faces in controlling insurgent activity,” the report suggests. It estimates that Kenya would commit an additional $200 million in military expenditures if the fighting results in long-term instability inside South Sudan.
The report bases that projection on an estimated $200 million increase in Kenya’s military spending since late in 2011 when it intervened in Somalia in response to Al-Shabaab’s attacks.
Refugee influx
Unabated conflict in South Sudan will also increase the influx of refugees into Kenya, which already hosts the world’s largest camps for refugees. About 44,000 South Sudanese have already fled to Kenya since the start of the civil war late in 2013, the economic consulting firm notes. It says the presence of these refugees will cost about $93 million this year, with the expense likely to be borne primarily by donor nations and institutions.
All of South Sudan’s neighbours will experience negative economic consequences from a conflict that remains unresolved, the report says, estimating that Kenya, Ethiopia, Sudan, Tanzania and Uganda could collectively save up to $53 billion if the war were to end this year rather than continuing until 2019. (NMG)
