Kenya crisis jeopardises Africa's emergence from poverty

from Reuters Alert Net

Written by: Peter Apps

The sudden outbreak of violence plaguing Kenya since last week's disputed elections may have sparked a humanitarian crisis, but the real damage may go far deeper.

Only a few weeks ago, with fears mounting of a global economic downturn following the US sub prime mortgage crisis, Africa was being viewed by some investors as a relatively safe bet for the first time in recent decades. The end of major wars in western and southern Africa, a string of non-violent elections and decent if not spectacular economic growth figures across a string of countries was sparking new interest and optimism.

"In some ways, we are where India was in the early 1990s," African Development Bank President Donald Kaberuka told me in mid-December. "We are at the point where Africa is no longer an object of just pity and aid."

Kenya was regarded as central to this process. Sadly, the recent violence has potentially jeopardised that, investors say.

African growth was seen in the context of good growth across most developing economies, with the world's poorest having better access to banking and capital than ever before.

Shortly before Christmas, a report showed that microcredit - tiny loans to the poorest at relatively high rates of interest - had boomed from reaching only 13 million recipients a decade earlier to 10 times that number, with half a billion people benefiting around the world, if family members of recipients were taken into account. Many of those recipients were part of the world's "bottom billion" of people living on less than a dollar a day. The majority of the growth was in Asia, but Africa was seen to be following suit, with innovative Kenyan projects considered the most promising.

Now, the speed of Kenya's deterioration is potentially putting off investors and donors from risking more money in Africa, Reuters correspondent Matthew Tostevin writes, particularly as it comes at the same time as growing worries over the future leadership of the previous success story South Africa.

Populist former Deputy President Jacob Zuma beat current president Thabo Mbeki to take the leadership of the ruling African National Congress in December, but must face renewed corruption charges in court before United takes over from Mbeki in 2009.

Hardly a surprise, then, that developments in Kenya were said to be spreading gloom across the continent.

Comparisons with Rwanda's genocide may be excessive, Alastair Thomson writes, but images of torture churches and fleeing civilians do little to encourage fresh money.

Kenya's current crisis may pass - but even if it does, the long-term damage will remain, slowing any African growth and therefore the emergence of many ordinary Africans from poverty. And it is worth remembering that preventable infant illnesses, childbirth complications and poverty-related disease kill many more than high profile crises such as the present violence.